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TMI Blog2025 (2) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on external reports without demonstrating independent application of mind, thereby rendering the proceedings arbitrary and illegal. Section 14 of the IBC imposes a moratorium that prohibits proceedings against a company undergoing Corporate Insolvency Resolution Process (CIRP). 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 respondents' actions are in direct contravention of these provisions. Court holds that the reassessment proceedings initiated against the petitioner are without jurisdiction, arbitrary, and unsustainab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petition on April 29, 2022, and ratified the appointment of a Resolution Professional by the Committee of Creditors on August 26, 2022. 5. On December 19, 2023, the NCLT approved a resolution plan submitted by BTL EPC Limited, 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 no.4 issued a notice under Section 148A (b) of the Act dated March 27, 2023. This notice alleged suspicious transactions involving the petitioner, M/s. Ranisat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibits the initiation or continuation of any proceedings against the petitioner for the period prior to the effective date stipulated 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays for the issuance of a writ of mandamus to quash the notice dated March 27, 2023 under Section 148A (b), the order dated April 22, 2023 under Section 148A (d), and the 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 respondent authorities submit that the reassessment proceedings for the A.Y. 2019-20 were initiated upon receiving credible information regarding bogus sale transactions amounting to Rs. 16,00,51,002/- alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Plan under the heading "Taxation," the respondents emphasize that it prohibits only reassessment proceedings initiated after the Appointed Date and offers no relief for proceedings already initiated. Additionally, 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 permissibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. reported in (2021) 9 SCC 657 it was held that: "95. i) 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 Government, any State Government or any local authority, guarantors and other stakeholders. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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