2023 (9) TMI 1163 - HC - Income Tax

Maintainability of appeal against statutory claims - Corporate Insolvency Resolution Process commenced - HELD THAT - As per improved corporate resolution plan, which was approved by the NCLT there was no provision made, inter alia, for statutory claims. Having regard to the fact that the claims which are the subject matter of the present appeal concern the period prior to the approval of the resolution plan by the NCLT, in which no provision has been made for statutory dues, the continuation of this appeal would serve no purpose. The court in these matters adopts a clean slate approach, and therefore, this appeal would have to be closed.

Summary

Issues involved:
The judgment concerns the Assessment Year (AY) 2008-09 and the maintainability of an appeal challenging the order passed by the Income Tax Appellate Tribunal.

Assessment of the Appeal:
The High Court heard the appeal filed by the revenue challenging the Tribunal's order dated 30.12.2016. The matter was listed before the court multiple times due to issues with service of notice. A substantive hearing took place on 25.07.2023, during which it was revealed that a modified resolution plan was approved by the National Company Law Tribunal (NCLT) on 04.02.2020. The resolution plan did not include provisions for statutory dues. The appellant sought accommodation to decide whether to press the appeal based on relevant case laws.

Public Notice and Claims:
The respondent filed a compendium of documents as per the court's direction, including a public announcement notice issued by the Resolution Professional (RP) on 19.03.2017. The notice called for various creditors to file proof of claims by 31.03.2017. It was noted that the appellant did not lodge its claim before the RP.

Corporate Insolvency Resolution Process (CIRP) and Resolution Plan:
The Corporate Insolvency Resolution Process (CIRP) for the respondent commenced on 19.03.2017. A resolution plan presented by Atyant Capital India Fund-1 was initially approved by the NCLT on 15.12.2017 and later modified on 13.06.2019. The improved plan increased the amount for secured creditors from Rs. 81 crores to Rs. 123.1 crores. The approved plan did not provide for statutory dues.

Closure of the Appeal:
Considering that the claims in the appeal predate the approval of the resolution plan by the NCLT, where no provision was made for statutory dues, the court adopted a "clean slate" approach. It was concluded that the continuation of the appeal would serve no purpose, and thus, the appeal was closed.