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TMI Blog2024 (10) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 (8) TMI 185 - GUJARAT HIGH COURT ] that when the NCLT has approved the application filed under section 13(6) of IBC, 2016 and resolution plan submitted by the applicant was approved, the AO would not have any jurisdiction to reopen the assessment with regard to the assessment year 2019-20. Thus in view of the legal provisions under the IBC, 2016, since the resolution Plan has been approved by the Adjudicating Authority, all proceedings pending in respect of the Corporate Debtor (CD), i.e. the assessee are barred thereafter and cannot be allowed to continue. Only the claims made as per the plan can be recovered. As regards the refund, if any arising on account of a favourable order is concerned, the Successful Resolution Applicant, i.e. Tega Industries Limited is entitled to pursue all actionable claims in favour of the assessee/CD after the approval of the plan. Hence, the appeal filed by the assessee cannot continue and is dismissed on account of being infructuous. - Shri Sanjay Garg, Judicial Member And Shri Rakesh Mishra, Accountant Member For the Appellant : Shri Abhishek Sureka, AR For the Respondent : Shri Rakesh Kumar Das, CIT, DR, Shri Vineet Kumar, Addl. CIT, Sr. DR O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1961. That the Appellant craves leave to add, alter, supplements, amend, modify, substitute and/or rescind the grounds hereinabove before or at the time of hearing of this appeal. II. ITA No. 1145/Kol/2018 (Assessment Year: 2013-14) 1. For that, the disallowances and/or denial of claims and/ or reliefs made by the Learned Commissioner of Income Tax (Appeals) ['Ld. CIT(A)'] are grossly unjustified, erroneous, perverse and unsustainable and necessary direction be given for appropriate relief in accordance with law. Disallowance of provision of freight charges: Rs. 46,82,901 2) For that, the Ld. CIT(A) has erred in confirming the disallowance of provision for freight charges on the ground that the provision is not allowable as deduction under Section 37 of the Act. 3) For that, the Ld. CIT(A) has erred in not appreciating the fact that the provision represented an actual liability towards freight expenses and not contingent or an unascertained liability. Disallowance of loss order provision under miscellaneous expenses:Rs. 22,55,642 4) For that, the Ld CIT(A) failed to appreciate that the provision for foreseeable loss of Rs 22,55,642 was ascertained liability and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment was completed u/s 143(3) of the IT Act, 1961 on 29.12.2011 at the total income of Rs. 20,48,40,900/-. The case was further considered for initiation of proceeding u/s 263 of the IT Act, 1961 by the Ld. CIT on the following issues: (i) Non-deduction of TDS u/s 194J against Management fee paid to McNally Bharat Engineering Company Limited during the FY-2008-09, (ii) Non-deduction of TDS against Royalty during the FY-2008-09. 3.1 Subsequently the revision order was passed on 26.03.2014 by the Ld. CIT-1, Kolkata and the assessment was set aside on the above two limited issues with a direction to re-assess the allowability of the above two expenses after bringing all the facts and records as per law. 3.2 In the course of the assessment proceedings taken up in consequence to the revision order of the Ld. CIT and after considering the submission of Ld. AR of the assessee, the entire management fee so claimed to the tune of Rs. 3,52,76,000/- along with another sum of Rs. 1,02,87,073/- was disallowed and added back to the total income of the assessee company for the AY-2009-10. The assessee filed an appeal before the Ld. CIT(A)-1, Kolkata who partly allowed the appeal. Aggrieved with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d further that after the approval of the resolution plan, the statutory tax liability of the company towards the Income-tax department has ceased to exist. However, in this case, the ld. Counsel for the assessee claims that if the claim of the assessee is allowed in this appeal, the assessee company now succeeded by Tega Group, will get refund of the taxes deposited. However, in all such appeals before this Tribunal, it has come to the knowledge that the concerned Departmental Representatives/Assessing Officers/Income-tax Authorities, are even not aware of the insolvency proceedings pending or decided in respect of the assessee company and the Department's statutory tax dues toward the assessee are not considered in the resolution plan and it has been generally pleaded by the Department that since the department was not given notice nor was it aware of the insolvency proceedings and, therefore, the Department's claim cannot be defeated. These issues crop up many a times before this Tribunal Therefore, it is directed that the ld. D/R will take up thin issue with the concerned Departmental Authorities/Higher officials of the Department so that the Department's claim canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olution Plan, as mentioned on Page 15 thereof, the Operational Creditors, who are the Statutory Creditors (Government Dues), are proposed the treatment of Rs. 1,00,000 (Rupees one lakh only) out of the Total Proposed Treatment to all the creditors at Rs. 1,65,37,69,233/-. The Relinquishment/Waiver of liabilities and Approvals are mentioned in Para 28 on Page 17 of the order. As per S. No. 2 thereof, no Person shall be entitled to take, initiate, institute or continue any suits, steps or proceedings against the Corporate Debtor or its Assets (whether by way of demand, legal proceedings, alternative determination process including arbitration or an expert determination process, the levying of distress, execution of judgment, decree or order, or otherwise) in any court of law, tribunal, arbitration panel or other authority in any jurisdiction whatsoever (including taking any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property) for the purpose of obtaining payment of any Liability, or for the purpose of placing the Corporate Debtor into liquidation or any analogous proceedings. S. No. 5 mentions that any dues, liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Company Ltd. [2021 SCC Online SC 313 decided on 13.04.2021] wherein the Hon'ble Supreme Court has held that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt, any State Govt or any local authority, guarantors and other stakeholders. We place reliance on the recent judgement of Hon'ble High Court of Rajasthan in the matter of EMC v. State of Rajasthan wherein it has been inter-alia held that: Law is well-settled that with the finalization of insolvency resolution plan and the approval thereof by the NCLT. all dues of creditors, Corporate, Statutory and others stand extinguished and no demand can be raised for the period prior to the specified date. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Developers, Sree Metaliks and Rishi Ganga Power Corporation which would prevail and lead us to the inevitable conclusion that the reassessment action would not sustain. 23. We, accordingly, allow the instant writ petition and quash the impugned notice under Section 148 for A.Y. 2014-15 dated 31 March 2021. 5.2 In Uttam Value Steels Ltd. v. Assistant Commissioner of Income-tax [2024] 166 taxmann.com 493 (Bombay) it has also been held as under: Even a plain reading of section 31(1) would show that once the NCLT approves the resolution plan, it would be binding on, among others, the Central Government and its agencies in respect of payment of any statutory dues arising under any law for the time being in force. It is now trite law that the effect of resolution of a corporate debtor is that the terms of resolution bind tax authorities and their enforcement actions a position in law declared in numerous judgments of the Supreme Court. While it is not necessary to extract from a long line of decisions of the Supreme Court to note the effect of approval of the resolution plan under Section 31 of the IBC, as rightly pleaded by the Petitioner-corporate debtor the judgment in Ghanshyam Mishr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that initiation and continuation of proceedings relating to the period prior to the approval of the resolution plan cannot be indulged in. Upon completion of the CIRP, the petitioner has completely changed hands and has begun on a clean slate under new ownership and management. [Para 18] 5.3 Further, the Coordinate Bench C of the Tribunal in the ITAT KOLKATA in the case of Kohinoor Steel (P.) Ltd. V. Income-tax Officer [2024] 159 taxmann.com 571 (Kolkata Trib.) have also held as under: It was observed that the operational creditor of assessee has filed the petition before the NCLT and as per the assessee s own case for its CRIP as per rule 4 of Insolvency Bankruptcy Code (IBC), 2016 no proceedings can continue against the corporate debtor i.e. the assessee after the order of the NCLT. In view of this and drawing further force from the order of co-ordinate bench of Tribunal in the case of Palogix Infrastructure (P.) Ltd. V. Asstt. CIT [2022] 135 taxmann.com 73/193 ITD 329 (Kol. Trib.) 2021 (10) TMI 1255-ITAT KOLKATA, dated 27-10-2021 all the appeals before the Tribunal filed by the assessee is to be dismissed as infructuous. [Para 9] It is pertinent to note that as per the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d prevail notwithstanding anything inconsistent therewith contained in any other law for the time being in force. [Para 9.7] As per section 31 of the Code, resolution plan as and when approved by the Adjudicating Authority shall be binding on the corporate debtor and its employees, members, creditors, guarantors, and other stakeholders involved in the resolution plan. Thus, this will prevent State authorities and Regulatory bodies including Direct Indirect Tax Departments from questioning the resolution plan. Thus, in view of the above, no proceedings can be initiated against the corporate debtor, that is, assessee-company including income tax proceedings and recovery of demand or giving effect of any order. It is well settled now that IBC has an overriding effect on all the acts including Income-tax Act which has been specifically provided under section 178(6) as amended with effect from 1-11-2016. [Para 9.8] A reading of the provisions under sections 13 and 14 of the Code along with the decision in Ghanashyam Mishra Sons (supra), clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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