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2022 (2) TMI 798 - AT - Insolvency and BankruptcyCIRP - Carry forward of losses - Resolution Professional has during pendency of approval of the plan issued notice to the Income Tax Authorities but no objection was filed - Adjudicating Authority has disallowed carrying forward of losses on the ground that the liability of the Corporate Debtor has been extinguished - HELD THAT:- The Third Proviso of Section 79 sub-clause (b) provides that nothing contained in Section 79 shall apply to a company where a change in the shareholding takes place in a previous year pursuant to a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 after affording a reasonable opportunity of being heard to the jurisdictional Principal Commissioner or Commissioner - The amendment in Section 79 of the Income Tax Act, 1961 providing for exception in case of a company where change in shareholding takes place pursuant to Resolution Plan was with purpose and object. Thus, claim of carry forward of losses is not impermissible but can only be granted giving opportunity to the appropriate Income Tax Authority. The benefit of carry forward of losses can be availed by the Appellant subject of opportunity to be given to Income Tax Authority to pass appropriate orders in accordance with Section 79 - the observations made in paragraph 238 and 244 of the order of the Adjudicating Authority need to be deleted and are hereby deleted and the benefit of carry forward losses can be claimed by the Appellant subject to decision by appropriate Income Tax Authority as per Section 79 of the Income Tax Act. It is open for the Appellant to claim benefit of carry forward losses as per Section 79 of the Income Tax Act before appropriate competent Income Tax Authority which shall decide the claim in accordance with law. Appeal disposed off.
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