2021 (9) TMI 328 - AT - Income Tax

Overriding nature and supremacy of the provision of IBC 2016 - income Tax Sales Tax/VAT/GST Excise Entry Tax Municipality Land Due Water Department Dues etc. by way of Taxes Fees Penalties penal Interest Damages TDS VAT GST etc. over and above the Amount stated in the Resolution Plan - Liabilities accrued/due under Statutory Dues - Liabilities/Litigations/Disputes/Appeals with Income Tax Dept - Approval by NCLT for all Statutory Dues accrued or may get accrued due to Past Liabilities as on insolvency commencement date - HELD THAT - As the resolution plan filed by the corporate debtors which has been approved by the COC has been accepted by the NCLT under the provision of section 31(1) of the Insolvency Bankruptcy Code 2016 (hereinafter referred to as IBC 2016 ). We note that this order is binding on the corporate debtor its employees members creditors guarantors and other stakeholders involved in the Resolution Plan. AR submits that the order of NCLT is binding on the Income Tax Department and the Hon ble Apex Court in the case of PCIT Vs. Monnet Ispat Energy Ltd. 2018 (8) TMI 1775 - SC ORDER opined the overriding nature and supremacy of the provision of IBC 2016. In view of the aforesaid Resolution Plan approved by the NCLT we note that this appeal filed by the revenue cannot be further pursued by them and therefore the appeals have to be dismissed.

Summary

Issues:
Appeal by revenue against CIT(A) order for AY 2010-11, acceptance of resolution plan by NCLT, binding nature of NCLT order on Income Tax Department, dismissal of appeal and cross objection.

Analysis:
The judgment pertains to an appeal by the revenue and a Cross Objection by the assessee against the order of Ld. CIT(A)-1, Kolkata for the assessment year 2010-11. The Ld. AR of the assessee highlighted that the NCLT, Kolkata Bench had accepted the resolution plan in the matter of Insolvency and Bankruptcy Code, 2016 for the assessee. The resolution plan included provisions regarding waiver approval for statutory dues, liabilities, litigations, disputes, and appeals with the Income Tax Department. The NCLT's acceptance of the resolution plan under section 31(1) of the IBC, 2016 was emphasized, stating that the order is binding on various stakeholders involved in the Resolution Plan. Citing the case of PCIT Vs. Monnet Ispat & Energy Ltd., it was argued that the provision of IBC, 2016 holds supremacy. Consequently, the Ld. AR contended that the revenue's appeal could not be pursued further due to the NCLT-approved resolution plan, leading to the dismissal of the appeals.

Moving on to the assessee's Cross Objection, it was noted that the Ld. AR chose not to press the same in light of the NCLT order accepting the resolution plan. Therefore, the Cross Objection of the assessee was also dismissed. In conclusion, the judgment resulted in the dismissal of both the revenue's appeal and the assessee's Cross Objection. The order was pronounced in the open court on 19th February 2021.