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IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH
SUNIL B. SHUKRE, ANIL L. PANSARE, JJ.
Murli Industries Limited – Petitioner
Versus
Assistant Commissioner of Income Tax, Nagpur – Respondent
Writ Petition Nos. 2948, 2965 of 2021
Decided On : 23-12-2021
Income Tax Act, 1961 - Section 147 and 148 - Insolvency and Bankruptcy Code, 2016 - Section 7 and 30(2) of IBC - Companies Act, 1956 - Notices - Business of manufacture and sale of cement - Assessment - Whether Authorities of Income Tax Department can issue notice under Section 148 of Act, 1961 to a Corporate Debtor, calling upon it to submit a return in prescribed form for assessment year falling prior to date of approval of Resolution Plan under Code, 2016 on ground that Respondent No. 1 - Assessing Officer had a reason to believe that the income chargeable to tax of Corporate Debtor has escaped assessment within meaning of Section 147 of Act, 196 - Petitioner is a company registered under Act, 1956, and is engaged in the business of manufacture and sale of cement. According to the Petitioner, the Petitioner - company had filed its return of income for the assessment year 2014 - 15 declaring a loss amount - Petitioner’s case was selected for scrutiny by Income Tax Authorities and an order to that effect was passed under Section 143(3) r/w 144 of Act, 1961.
Finding of the Court:
Once public announcement is made under the IBC by the Resolution Professional calling upon all concerned, including the statutory bodies, to raise claim, it would be expected from all the stakeholders to diligently raise their claim. The Income Tax authorities in that sense, ought to have been diligent to verify the previous years’ assessment of the Corporate Debtor as permissible under the law and to raise the claim in the prescribed form within time before the Resolution Professional. In the present case, the Income Tax Authorities failed to do so and therefore, the claim stood extinguished - In absence of any such claim having been made and dealt with by the Resolution Professional and in absence of any provision to settle such claim in the Resolution Plan, such claim could not be raised subsequently. In that sense, Petitioner is correct in contending that the impugned notice could not have been issued by the Assessing Officer - Impugned notices quashed and set aside.
Result: Petitions are allowed.
JUDGMENT :
ANIL L. PANSARE, J.
1. Rule. Rule made returnable forthwith. The matter is heard finally by the consent of the learned counsel for the parties.
2. Heard Shri Sheth, learned counsel for the Petitioner and Shri S.N. Bhattad, learned counsel for the Respondent Nos. 1 and 2.
3. The question involved in the Petition is:
4. There are two connected Petitions herein. The impugned notice in W.P. No. 2948 of 2021 is dated 25.03.2021 and in W.P. No. 2965 is dated 24.03.2021. For the sake of convenience, the facts of Writ petition No. 2948 of 2021 are being considered. The Petitioner - Murli Industries Ltd. is a company registered under the Companies Act, 1956, and is engaged in the business of manufacture and sale of cement. According to the Petitioner, the Petitioner-company had filed its return of income for the assessment year 2014-15 on 29.09.2014 declaring a loss of Rs. 2,80,30,74,365/-. The Petitioner’s case was selected for scrutiny by the Income Tax Authorities and an order to that effect was passed on 27.12.2016 under Section 143(3) read with Section 144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). Respondent No. 1 is the Assessing Officer of the Petitioner who has issued the impugned notice. Respondent No. 2 is the Principal Commissioner of Income Tax, who has the administration jurisdiction over the cases of the Petitioner and who has allegedly granted approval for issuance of impugned notice. Respondent No. 3 is the Union of India and is the employer of Respondent Nos. 1 & 2. The Respondent No. 1-Assessing Officer has issued the notice dated 25.03.2021 under Section 148 of the Act, seeking to reopen the concluded assessment of the Petitioner company for the assessment year 2014-15. The Petitioner has challenged the legality and validity of the said notice mainly on the ground that it is contrary to the decision of the Hon’ble Supreme Court of India in the case of Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited and Others, 2021 (9) SCC 657.
5. In the present case, one M/s. Edelweiss Asset Reconstruction Company Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) to initiate Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP Proceedings”) against the Petitioner. The said Application was admitted by the National Company Law Tribunal, Mumbai (hereinafter referred to as “NCLT”) vide order dated 05.04.2017 and on 11.04.2017, an Interim Resolution Professional (hereinafter referred to as “IRP”) was appointed by the NCLT. The IRP was later appointed as the Resolution Professional (hereinafter referred to as “RP’) of the Petitioner company. The RP made a public announcement in accordance with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, calling upon the creditors to submit a proof of their claim. In response, the Deputy Commissioner of Income Tax (TDS), Circle-1, Nagpur, (hereinafter referred to as “DCIT-TDS”) submitted a claim for Rs. 50,23,770/-. According to the Petitioner, this was the only claim received from the Respondents-Income Tax Department in response to the public announcement. The Respondents did not raise any other claim.
6. Dalmiya Cement (Bharat) Limited submitted a Resolution Plan on 28.12.2017. The said plan was approved subject to
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