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TMI Blog2024 (5) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 148 read with Section 147 of the Act only deals with a situation where any income chargeable to tax has escaped assessment for any assessment year. We are unable to fathom as to how the provisions of Section 148 of the Act can be applied for collection of evidences of third party, ex-promoters etc., and we say this because there are separate provisions under Section 133(6) of the Act in which, such evidences can be collected. We are also unable to understand how the provisions of Section 148 of the Act can be used when the proceedings are not for recovery of tax. Both Petitioner and respondent agreed. Petitioner at the same time states that Revenue s doors should not be closed and they must be permitted to take such steps as advised a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) for the assessment year 2013-14, the order dated 6th December 2021 passed by respondent no.1 rejecting the objections of petitioner for assessment year 2013-2014, the assessment order dated 18th February 2022 passed under section 144 r.w.s. 147 of the Act for assessment year 2013-2014 and the penalty notice dated 23rd March 2022 issued under section 274 r.w.s. 271(1)(c) of the Act for the assessment year 2013-14. 2 On or about 29th June 2017, State Bank of India filed a petition before the National Company Law Tribunal ( NCLT ) for initiation of Corporate Insolvency Resolution Process ( CIRP ) against petitioner under the provisions of the Insolvency and Bankruptcy Code, 2016 ( the Code ). The NCLT admitted the petition on 18th July, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021, rejected the submission of petitioner by inter alia holding that .all income tax proceedings are not always for recovery of tax, it can be used for collection of evidence of third parties, ex-promoters etc . 5 Thereafter, respondent no.1 has also proceeded to pass an order dated 18th February 2022 under section 144 r/w section 147 of the Act, making an addition of Rs.109.70 crores to the income of petitioner. It is noted that although at paragraph 9.5 of the assessment order, respondent no.1 notes that the assessment order is passed on a protective basis, respondent no.1 has also proceeded to issue a notice of demand raising a demand of Rs. 305.70 crores. Further, respondent no.1 has initiated penalty u/s 271(1)(c) of the Act. 6 Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty, ex-promoters etc., and we say this because there are separate provisions under Section 133(6) of the Act in which, such evidences can be collected. We are also unable to understand how the provisions of Section 148 of the Act can be used when the proceedings are not for recovery of tax. 9 During the course of submission, the Learned ASG stated that in view of the legal position as it stands under the Code, once resolution plan has attained finality, new management and company can get the benefit of clean slate principle. While the department does not dispute that such benefit has to go to new management, the Learned ASG further submitted that while department would not go to the new management, this cannot, however, result into direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be noted that as per paragraph 3.3.5 of the resolution plan, the value of all dues including income tax dues is treated as nil and is deemed to have been fully discharged and settled for any period prior to the closing date irrespective of whether final or contingent, whether disputed or undisputed, whether or not the Government authority was aware of such claim. Further para 3.3.3 of the Resolution Plan also provides that all proceedings initiated before any forum by the operational creditors (including the central government) shall stand withdrawn and abated. It is also noted that the Incometax Department had challenged the order of the NCLT approving the resolution plan before the NCLAT, which appeal was rejected on account of delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agement is ex-facie not aware of the relevant facts in respect of the period sought to be reopened and may well be incapable of properly participating in reassessment proceedings. In this view of the matter the proposed reassessment proceedings (no matter what the purpose) would be a futile endeavour. (e) Insofar as the contention / submission of the revenue regarding the possible liability of previous management, the Revenue may take whatever steps are available to them in law to take action, if any, against expromoter, other third parties, but the same cannot be done by issuing notice under section 148 of the Act which requires petitioner to file the return of income, and thereafter in response to such notice participate in further procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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