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TMI Blog2024 (12) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Insolvency Resolution Process (CIRP). Furthermore, the resolution plan approved by the National Company Law Tribunal (NCLT) has overriding authority, as per Section 238 of the IBC and expressly precludes reassessment or revision proceedings for the period prior to the effective date stipulated in the plan. The Court holds that the reassessment proceedings initiated against the petitioner are without jurisdiction, arbitrary, and unsustainable in law. Consequently, the writ petition is allowed, and the impugned notices and orders issued under Sections 148A (b), 148A (d), and 148 of the Income Tax Act, along with all consequential proceedings, are quashed. - HON BLE JUSTICE RAJARSHI BHARADWAJ Present:- For the Petitioner: Mr. Prani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited, fixing the appointed date as the date of the NCLT order and the effective date as February 17, 2024. The resolution plan, binding on all stakeholders, expressly stipulated that no proceedings or inquiries could be initiated or continued against the petitioner for the period prior to the effective date. 6. Notwithstanding the resolution plan, the respondent authorities issued a notice under Section 148A (b) of the Act dated March 30, 2023. This notice alleged suspicious transactions involving the petitioner, M/s. Ranisati Metal Industries and certain shell entities, seeking explanations. 7. The petitioner, in response, submitted a detailed reply on April 21, 2023, supported by documentary evidence. The reply emphasized the moratorium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the resolution plan. The petitioner draws the court's attention to Serial No. 36 under the heading Taxation in the resolution plan, which explicitly states that no reassessment or revision proceedings shall be initiated for the period prior to the effective date and any consequential demand shall be deemed non-existent. 11. The petitioner submits that the respondent authorities have blatantly disregarded the binding nature of the NCLT s order and the provisions of the approved resolution plan. The failure of the respondents to respect the finality and overriding effect of the resolution plan constitutes a violation of judicial discipline and undermines the legal safeguards provided under the IBC. 12. It is also argued that the reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice under Section 148, along with all consequential proceedings. The petitioner also seeks a writ of mandamus directing the respondent authorities to refrain from initiating or continuing any proceedings against the petitioner in violation of the resolution plan approved by the NCLT. 16. Submissions of the Learned Counsel appearing for the respondents is that the reassessment proceedings for the A.Y. 2016-17 were initiated upon receiving credible information regarding bogus sale transactions amounting to Rs. 195,96,00,000/- allegedly booked in the name of shell companies M/s Ranisati Metal Industries, Ranisati Industries Ltd., and TIF Castings Ltd. during the F.Y. 2015-16. Pursuant to this information, a notice under Section 148A (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner has not demonstrated the existence of an Effective Date as defined in the Resolution Plan. 20. The respondents further rely on the judgment in Dishnet Wireless Ltd. vs. ACIT reported in [2022] 139 taxmann.com 493 , wherein the Hon ble Madras High Court held that proceedings under the Insolvency and Bankruptcy Code, 2016, cannot dilute the statutory rights of the Income Tax Department under the Income Tax Act, 1961. The court upheld that reopening of assessments under Section 148 is permissible even where CIRP is involved. 21. In view of these submissions, the respondents assert that the reassessment proceedings were lawfully initiated and do not contravene the provisions of the IBC or the approved Resolution Plan. They pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 (iii) Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under section 31 could be continued. 24. For the foregoing reasons, the Court holds that the reassessment proceedings initiated ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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