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ABHAY S. OKA, UJJAL BHUYAN
Vaibhav Goel – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
Headnote: Read headnote
JUDGMENT :
ABHAY S. OKA, J.
FACTUAL DETAILS
1. This appeal under Section 62 of Insolvency and Bankruptcy Code, 2016 (for short ‘the IB Code’) takes an exception to the judgment and order dated 25th November 2021 passed by the National Company Law Appellate Tribunal (‘the NCLAT’). The Corporate Insolvency Resolution Process (CIRP) was initiated concerning the corporate debtor M/s. Tehri Iron and Steel Casting Ltd. (‘the CD’). The appellants are the Joint Resolution Applicants. They submitted a Resolution Plan dated 21st January 2019. The National Company Law Tribunal (‘the NCLT’), vide its order dated 21st May 2019, approved the Resolution Plan submitted by the appellants.
2. The Resolution Plan had referred to the liability of Rs. 16,85,79,469/- (Rupees Sixteen-crores, eighty-five lakhs, seventy-nine thousand, four-hundred and sixty-nine only) of the first respondent (Income Tax Department) for the assessment year 2014-15 based on the demand dated 18th December 2017 which was rectified under section 154 of the Income Tax Act, 1961 (for short
Once a resolution plan is approved under the Insolvency and Bankruptcy Code, claims not included therein are extinguished and cannot be enforced, ensuring clarity for the resolution applicant.
Once a resolution plan is approved under the IBC, the claims provided in the plan are binding and any claims not included in the plan are extinguished.
The main legal principle established in the judgment is the binding effect of the resolution plan approved by the NCLT on stakeholders, as well as the extinguishment of claims not part of the approve....
The approval of a resolution plan under the IBC extinguishes all claims not included in the plan, including tax liabilities.
The approval of a resolution plan under the IBC extinguishes all claims not included in the plan, including tax liabilities, ensuring a fresh start for the corporate debtor.
Once a resolution plan is approved under the Insolvency and Bankruptcy Code, no claims can be pursued for dues prior to that approval, rendering subsequent assessment orders and notices invalid.
The Insolvency and Bankruptcy Code's provisions override tax claims from pre-insolvency periods, barring enforcement of assessments not included in a Resolution Plan.
The approval of a Resolution Plan under the IBC extinguishes all prior tax dues, making any recovery attempts invalid.
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