2023 (3) TMI 1354 - HC - Income Tax

Validity of re-opening post insolvency proceedings - demand of income tax after the Approval of Resolution Plan - approval of the resolution by the NCLT - HELD THAT - As respondent income tax authority is not in a position to deny the aforesaid factual and legal position. See EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. 2021 (4) TMI 613 - SUPREME COURT , THE SIRPUR PAPER MILLS LIMITED ANOTHER 2022 (1) TMI 977 - TELANGANA, HIGH COURT , MURLI INDUSTRIES LIMITED., 2021 (12) TMI 1182 - BOMBAY HIGH COURT Thus the impugned notice under Section 148A(b) of the Income Tax Act dated 1st June, 2022 and all subsequent proceedings are without jurisdiction and are not tenable in the eye of law and as a consequence of this declaration, all legal consequences will automatically follow.

Summary

Issues involved: Challenge to notice under Section 148A(b) of the Income Tax Act and subsequent proceedings based on lack of jurisdiction post NCLT approval.

Summary:

The petitioner challenged the impugned notice under Section 148A(b) of the Income Tax Act and all subsequent proceedings for the assessment year 2016-2017, contending that they were without jurisdiction after the NCLT approval by its order dated 1st June, 2022, which was an admitted position. The respondent, represented by Ms. Das De, did not contest this factual and legal position. The petitioner relied on various judicial decisions, including those of the Hon'ble Supreme Court and different High Courts, to support their contention.

The High Court, after considering the submissions and the mentioned judicial precedents, held that the impugned notice under Section 148A(b) of the Income Tax Act dated 1st June, 2022, and all subsequent proceedings were without jurisdiction and not legally sustainable. Consequently, the Court declared that all legal consequences would automatically ensue from this declaration. The writ petition, numbered WPA 4119 of 2023, was disposed of with this observation and direction.