Tax liabilities are extinguished upon approval of a resolution plan under the Insolvency and Bankruptcy Code, preventing subsequent revision notices under the Income Tax Act.

JUDGMENT :

(D.N. RAY, 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 G. Sanghani waives service of the notice of the rule on behalf of the Respondent. With the consent of the learned advocates for the respective parties, the matter is taken up for hearing, as the issue involved is very short.

3. The petition has been filed under Article 226 of the Constitution of India with the following prayers :-

“a) Quash and set aside the impugned notice u/s 263 dated 13.01.2025 at ‘ANNEXURE – A’ to this petition;

b) pending the admission, hearing and final disposal of this petition, to stay further proceedings pursuant to the impugned notice;

c) any other and further relief deemed just and proper be granted in the interest of justice;

d) to provide for the cost of this petition.”

4. The brief facts of the case are as follows:

4.1 The Petitioner is a registered company, inter alia, engaged in the business of manufacturing components for general engineering and automotive industries. The Petitioner filed the return of income on 30.11.2015 for the Assessment Year 2015-16, declaring loss of Rs. 36,52,09,196/-.

4.2 The case was reopened by the issuance of a notice dated 31.03.2022 under Section 148 of the Income Tax Act, 1961 (“the Act”). The assessment was completed under Section 147 read with Section 144 and 144B of the Act on 06.03.2023, determining the total income of Rs. 42,46,54,081/-.

4.3 The Petitioner was subjected to the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC Code”) wherein, a Corporate Insolvency Resolution Process (“CIRP”) was initiated by the Indian Overseas Bank under Section 7 of the IBC Code, which was admitted by the Adjudicating Authority vide order dated 01.09.2020.

4.4 An Interim Resolution Professional was appointed by the Hon’ble Tribunal, who made a public announcement in accordance with Section 13, 15 and other relevant provisions of the Code read with the Regulation 6 of the Insolvency Regulations, 2016, thereby inviting claims from the various creditors of the Petitioner.

4.5 Further, under the CIRP, the Resolution Plan of Steel Wheels Limited for the revival of the Petitioner was approved by the Hon’ble Tribunal vide order dated 12.10.2023 under Section 30(6) of the Code. The said Resolution Plan provided for the waiver and extinguishment of all the unassessed/assessed tax liabilities for the period prior to the NCLT approval date.

4.6 The Respondent has issued the impugned notice dated 13.01.2025, under Section 263 of the Act, seeking to revise the assessment order dated 06.03.2023 for the Assessment Year 2015-16.

4.7 Challenging the legality of the impugned notice dated 13.01.2025, the Petitioner has filed this Petition.

5. Mr. B.S.Soparkar, learned advocate appearing on behalf of the petitioner submitted that on the approval of the Resolution Plan under Section 31 of the IBC, all dues of the Corporate Debtor except those which have been specifically provided for in the Resolution Plan would stand extinguished in terms of the provisions of the IBC and the decisions of the Hon’ble Apex Court in The Committee of Creditors of Essar Steel Ltd. Vs. Satishkumar Gupta reported in (2020) 8 SCC 531 and Ghanshyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd., reported in (2021) 9 SCC 657. Mr. Soparkar, learned advocate submitted that in the present case, the tax dues stand extinguished in terms of the Resolution Plan .

5.1 Mr.Soparkar, learned advocate further contended that, even on merits, the impugned notice under Section 263 of the Act is bad, inasmuch as, the provisions of Section 92BA(i) have been omitted from the statute vide Finance Act, 2017 and therefore, there could be no occasion to refer the matter to the Transfer Pricing Officer and therefore, the Assessment Order dated 06.03.2023, which the impugned