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BHARGAV D. KARIA, MAUNA M. BHATT
AUSIL CORPORATION PRIVATE LIMITED – Appellant
Versus
ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, RAJKOT – Respondent
JUDGMENT :
MAUNA M. BHATT, J.
1. Heard learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Mr. Karan G. Sanghani for the respondent.
2. Rule, returnable forthwith. Learned Senior Standing Counsel Mr. Karan Sanghani waives service of notice of rule for and on behalf of the respondent.
3. This petition under Article 226 of the Constitution of India is filed challenging the notices dated 17.04.2021 issued under Section 148 of the Income Tax Act, 1961 (for short ‘the Act’) and order dated 28.07.2022, passed under Section 148A(d) of the Act for Assessment Year 2016-17.
4. The brief facts are as under:
4.2. The petitioner- company was subjected to insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (for short ‘the Code’) wherein a Corporate Insolvency Resolution Process (for short ‘the CIRP’) was initiated vide order dated 05.02.2020 pursuant to an application made by Bank of India before the Hon'ble National Company Law Trib
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.
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.
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....
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.
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.
Approval of a resolution plan under the IBC extinguishes all past dues, preventing any assessment or demand for liabilities incurred prior to that approval.
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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