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BHARGAV D. KARIA, NIRAL R. MEHTA
Maruti Koatsu Cylinders Ltd. – Appellant
Versus
Dy Commissioner Of Income Tax, Circle 2(1)(1) Or His Successor – Respondent
JUDGMENT :
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
Heard learned advocate Mr.S.N.Divatia for the petitioner and learned advocate Mr.Rudram Trivedi for learned advocate Mr.Nikunt K. Raval for the respondents.
1. Rule, returnable forthwith. Learned advocate Mr.Rudram Trivedi waives service of notice of rule for and on behalf of the respondents.
2. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the order under Section 148A(d) of the Income Tax Act, 1961 (for short ‘the Act’) dated 20th March, 2023 for Assessment Year 2019-20.
3. The brief facts of the case are as under :
3.1. It is the case of the petitioner that the petitioner was carrying on business of manufacturing seamless steel cylinder and a Corporate Insolvency proceeding was initiated before the National Company Law Tribunal (for short ‘the NCLT’) who by order dated 25th May, 2018 under the provisions of Insolvency and Bankruptcy Code, 2016 appointed an Interim Resolution Professional (IRP) who was subsequently confirmed as Resolution Professional (RP) by Committee of creditors and had taken control and custody of the management and operations of the petitioner- Company.
3.2. T
The approval of a resolution plan by the NCLT extinguishes all claims not included in the plan, preventing re-opening of assessments by tax authorities.
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.
All claims of the Income Tax Department are extinguished upon approval of a resolution plan under the Insolvency and Bankruptcy Code, preventing reassessment notices for periods prior to insolvency.
Approval of a resolution plan under the Insolvency and Bankruptcy Code extinguishes all past dues, including those owed to statutory authorities, preventing further claims.
Approval of a resolution plan under the IBC extinguishes all past dues, preventing any assessment or demand for liabilities incurred prior to that approval.
Alternate remedy would not operate as a bar for invoking jurisdiction under Article 226 of the Constitution of India in at least three contingencies, namely, where writ petition has been filed for en....
Upon approval of a resolution plan under IBC, all claims not expressly included therein, including tax liabilities, are extinguished and cannot be pursued.
The extinguishment of liabilities under the IBC 2016 post-resolution plan approval necessitates a review of any notices issued for prior assessment years, emphasizing procedural fairness.
The court emphasized the importance of the respondent deciding the petitioner's objections in accordance with the law before taking any further steps in pursuance of the impugned notice.
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