Vaibhav Goel & Anr. vs Deputy Commissioner of Income Tax & Anr.

Court

Supreme Court of India

Date

20 March 2025

Case No.

Civil Appeal No. 49 of 2022

Result

Allowed

Bench

Abhay S. Oka, Ujjal Bhuyan

Citation

[2025] 3 S.C.R. 841 : 2025 INSC 375

Acts & Sections

Insolvency and Bankruptcy Code, 2016 Income Tax Act, 1961

Issue for consideration

Matter pertains to the validity of the income tax dues of the corporate debtor owed to the Central Government, when not a part of the approved Resolution Plan.

Headnote

Insolvency and Bankruptcy Code, 2016 – s.31(1) – Legal effect of approval of a Resolution Plan – After approval of resolution plan, issuance of demand notices by the Income Tax Department for assessment years 2012-13 and 2013-14 in respect of the Corporate Debtor-CD, however no claim about the demands submitted before the Resolution Professional – Application by the second respondent-Monitoring Professional challenging the demands – NCLT dismissed the application without assigning reasons and imposed costs – Said order upheld by the NCLAT – Correctness:

Held: All the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval u/s.31 – On facts, the income tax dues of the CD for the assessment years 2012-13 and 2013-14 not part of the approved Resolution Plan – Thus, in view of sub-section (1) of s.31, the dues of the Income Tax Departmentfirst respondent owed by the CD for the said assessment years stands extinguished – Resolution plan approved, binding on the IT Department – Thus, subsequent demands raised by Income Tax Department for assessment years 2012-13 and 2013-14 invalid and cannot be enforced – Approach of NCLT in dismissing the application without reasons and imposing costs unwarranted – Additional demands made by the IT Department in respect of the assessment years 2012-13 and 2013-14 will operate as roadblocks in implementing the approved Resolution Plan, and appellants will not be able to restart the operations of the CD on a clean slate – Impugned orders of NCLT and NCLAT set aside. [Paras 8, 10, 11, 13, 14]

Judgment Abhay S. Oka, J. FACTUAL DETAILS 1. This appeal under Section 62 of Insolvency and Bankruptcy Code, 2016 (for short, ‘the IB Code’) takes an exception to the judgment and order dated 25th November 2021 passed by the National Company Law Appellate Tribunal (‘the NCLAT’). The Corporate Insolvency Resolution Process (CIRP) was initiated concerning the corporate debtor M/s. Tehri Iron and Steel Casting Ltd. (‘the CD’). The appellants are the Joint Resolution Applicants. They submitted a Resolution Plan dated 21st January 2019. The National Company Law Tribunal (‘the NCLT’), vide its or

View Subscription Plans →