2022 (12) TMI 1525 - AT - Income Tax

Income tax proceedings/claims against company insolvent/dissolved - application u/s 7 of Insolvency and Bankruptcy Code, 2016 was filed by the financial creditor against the assessee before the NCLT, Guwahati Bench and moratorium was declared under Section 14 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - Since as per the order of the NCLT, Guwahati Bench, any claim of the Income Tax Department against the assessee company made prior to 20th September, 2018 are not maintainable in the eyes of law, all the instant bunch of appeals deserves to be quashed being infructuous. For the claims which have been allowed to be raised or admitted by the NCLT, Guwahati Bench and if they are raised in the instant bunch of appeals, then liberty is granted to the respective parties to file Miscellaneous Application for recalling of such issues within the time limit provided under the Act. Thus, all captioned appeals are dismissed as infructuous in terms indicated herein above.

Issues Involved:
1. Time-barred appeals.
2. Impact of the Insolvency and Bankruptcy Code (IBC) proceedings on the Income Tax Department's claims.
3. Validity and enforceability of claims against the assessee company prior to the approval of the resolution plan.

Detailed Analysis:

1. Time-barred Appeals:
The appeals in I.T.A. No. 104/Gty/2010 for AY 2006-07 and I.T.A. No. 183/Gty/2013 for AY 1998-99 were time-barred by 28 days and 5 days, respectively. Both parties filed condonation applications, and after reviewing the reasons, the tribunal found them satisfactory and admitted the appeals for adjudication.

2. Impact of the Insolvency and Bankruptcy Code (IBC) Proceedings:
The assessee, a limited company, was subject to an application under Section 7 of the IBC, 2016, filed by a financial creditor before the National Company Law Tribunal (NCLT), Guwahati Bench on October 26, 2017. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared under Section 14 of the IBC, 2016. The NCLT, Guwahati Bench, approved the resolution plan on September 20, 2018, which extinguished the claims of the Income Tax Department made prior to this date.

3. Validity and Enforceability of Claims Against the Assessee Company:
The Income Tax Department filed a claim of Rs. 162,025,953 for AY 2013-14 and AY 2014-15 before the IRP, out of which Rs. 19,792,084 was admitted. The resolution plan was approved by the Committee of Creditors (COC) and the NCLT, Guwahati Bench. The plan stipulated that BRS Ventures would infuse Rs. 1064 crores, with Rs. 120,23,691.03 paid to the Income Tax Department.

The tribunal referenced Section 31(1) of the IBC, 2016, which states that an approved resolution plan is binding on all creditors, including the Central Government. It also cited the Supreme Court's judgment in "Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta," which emphasized that all claims must be decided by the resolution professional and that a successful resolution applicant should not face undecided claims post-approval of the resolution plan.

Further, the Supreme Court in "Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited" clarified that once a resolution plan is approved, all claims not part of the plan stand extinguished. The Rajasthan High Court in "Ultratech Nathdwara Cement Ltd. vs. Union of India" reiterated that the purpose of the IBC is to revive the industry on a clean slate, and all dues and liabilities existing on the date of the resolution plan's finalization are within the exclusive domain of the resolution plan.

The NCLT, Guwahati Bench, in its order dated February 10, 2021, extinguished all claims and demands of the Income Tax Department against the assessee company prior to the approval of the resolution plan. The tribunal directed that any claims for the period from 1986-87 to the approval date of the resolution plan should not be entertained.

Conclusion:
In light of the above discussions and the NCLT, Guwahati Bench's order, the tribunal concluded that the appeals are not maintainable. However, for claims allowed by the NCLT, if raised in the appeals, the parties may file a Miscellaneous Application for recalling such issues within the time limit provided under the Act. Thus, all the captioned appeals were dismissed as infructuous.

Result:
The following appeals were dismissed as infructuous and not maintainable:
- I.T.A. No.: 104/Gty/2010 for AY 2006-07
- I.T.A. No.: 183/Gty/2013 for AY 1998-99
- I.T.A. No.: 440/Gty/2013 for AY 2008-09
- I.T.A. No.: 12/Gty/2018 for AY 1986-87
- I.T.A. No.: 108/Gty/2019 for AY 2011-12
- I.T.A. No.: 109/Gty/2019 for AY 2012-13
- I.T.A. No.: 119/Gty/2019 for AY 2010-11
- I.T.A. No.: 120/Gty/2019 for AY 2011-12
- I.T.A. No.: 121/Gty/2019 for AY 2012-13
- I.T.A. No.: 123/Gty/2019 for AY 2014-15
- I.T.A. No.: 161/Gty/2019 for AY 2010-11

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