2026 (4) TMI 580

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....ncome Tax Act, 1961, in respect of assessment years pertaining to the period prior to 19th July, 2023, being the date on which the Resolution Plan in respect of the Petitioner came to be approved by the National Company Law Tribunal, Mumbai Bench (hereinafter referred to as the "Adjudicating Authority") under Section 31 of the Insolvency and Bankruptcy Code, 2016. The Petitioner has, inter alia, prayed for the following reliefs: (i) Quash and set aside Assessment Orders passed and Notices issued by Respondent No. 1 in respect of any period prior to the approval of Resolution Plan i.e., 19th July, 2023; (ii) Quash and set aside consequential demands made by the Respondent No. 1 in respect of any period prior to the approval....

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....nder the Income Tax Act, 1961 in respect of assessment years prior to the approval of the Resolution Plan. The record indicates that a Notice of Demand dated 25th May, 2023 was issued for Assessment Year 2013-14. Thereafter, on 24th March 2024, Respondent No. 1 issued a further Notice of Demand for Assessment Year 2019-20, along with an order under Section 148A(d) and a consequential notice under Section 148 seeking to reopen the assessment for Assessment Year 2020-21. 4. It appears from the record that, in view of the continued action on the part of Respondent No. 1 in relation to demands pertaining to the period prior to approval of the Resolution Plan, the Petitioner moved the Adjudicating Authority by filing Interlocutory Application....

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.... view of the aforesaid conduct and the continuation of proceedings despite subsisting protection, the Petitioner is constrained to invoke the writ jurisdiction of this Court by filing the present Petition. 7. In the aforesaid backdrop, the issue which arises is whether, after approval of a Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, Respondent No. 1 can initiate or continue assessment, reassessment or penalty proceedings in respect of dues pertaining to the period prior to such approval. 8. In our view, the issue is no longer res integra. Section 31(1) of the Insolvency and Bankruptcy Code, 2016 provides that once a Resolution Plan is approved, it shall be binding on all stakeholders including the Cen....

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....nn. com. 492 (Bom) has reiterated that upon approval of a Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, all claims not forming part of the Resolution Plan stand extinguished and no proceedings in respect of such claims can be continued or initiated. It has been held that the said position equally applies to statutory authorities, including tax authorities. 11. In the present case, the impugned proceedings pertain to Assessment Years 2011-12 to 2021-22, all of which relate to a period prior to the approval of the Resolution Plan on 19th July, 2023. Respondent No. 1 had admittedly participated in the CIRP by lodging its claim. The Resolution Plan has attained finality and is binding on Respondent No. 1. 1....