TMI Blog2021 (10) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... llected at source, whether admitted or not, due or contingent, whether part of above claim of income tax authorities or not, whether part of tax due diligence finding or not, asserted or unasserted, crystallized or un-crystallized, known or known, secured or unsecured, disputed or undisputed, present or future, in relation to any period prior to the acquisition of control by the resolution applicant over the company pursuant to this plan shall extinguished by virtue of the order of the adjudicating authority and the company should not be liable to pay any amount against such demand. All assessments or other proceedings pending in case of the company, on the date of the order of the adjudicating authority relating to the period prior to that date, shall stand terminated and all consequential liabilities, if any, should be deleted and should be considered to be not payable by the company by virtue of the order of the adjudicating authority. Post the order of the adjudicating authority, no reassessment/revision or any other proceedings under the provisions of the Income Tax Act should be initiated on the company in relation to period prior to acquisition of control by the resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenging the validity of the assessment made by the Assessing Officer under section 143(3) of the Act as well as disputing the various additions/disallowances made therein. The ld. CIT(Appeals) did not find merit in the preliminary issue raised by the assessee challenging the validity of the assessment made by the Assessing Officer under section 143(3) of the Act and rejecting the same he upheld the validity of the said assessment. He also confirmed substantially the various additions/disallowances made by the Assessing Officer while computing the total income of the assessee. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 4. During the course of pendency of this appal before the Tribunal, certain developments took place and the same as brought to the notice of the Tribunal by the assessee-company in writing from time to time were as under:- The assessee-company was in default with Banks and taken before National Company Law Tribunal (NCLT) under Bankruptcy and Insolvency Code 2016. Old Management was suspended and new management was taken up and Resolution Process started. After deliberation, resolution plan of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance to terms of the said order. That all demand or claims of Income Tax Department prior to the abovementioned order whether disputed or undisputed, known or unknown including the disputing demand mentioned in this appeal in the name of assessee-company and its Permanent Account Number be extinguished/deleted/not realisable/non-existing and as not payable by the company and any proceedings which are pending or kept in abeyance regarding period prior to 12th February, 2018 be dropped or not to be revived post the order of adjudicating authority . Thereafter the assessee-company moved another application withdrawing the abovementioned additional ground and seeking admission of the following additional ground:- That in the light of the order of the Hon ble National Company Law Tribunal and peculiar facts of the case, Hon ble Income Tax Appellate Tribunal shall ascertain that realisable tax liability of assessee for the assessment year under consideration i.e. A.Y. 2010-11 is NIL . 6. When the application of the assessee for admission of the abovementioned additional ground was taken up for consideration by the Tribunal at the time of hearing fixed on 12.02.2020, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedence over secured creditors, who are private persons. 9. In the case of Swiss Ribbons vs.- Union of India, Hon ble Supreme Court held that the core objective of the Code is to readapt the corporate debtor monetarily and for that purpose to protect the corporate debtor s assets from further dilution. But to fully accomplish the said purpose, the creditors must be barred from bringing up belated claims against a successful resolution applicant striving to resurrect the corporate debtor. Elaborating further, Their Lordships observed that if the Government Departments are just going to bring up their claims after the company is transferred over to a successful resolution applicant, then intent with which the Code was incorporated will never be achieved. 10. In the case of Ghanashyam Mishra Sons Private Limited vs.- Edelweiss Asset Reconstruction Company Others, it was held by the Hon ble Supreme Court that a bare reading of section 31(1) of the Code is enough to establish that once the resolution plan receives the assent of adjudicating authority, it shall be binding on all the respective entities, including corporate debtor and its employees, members, creditors, guarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings under the provisions of the Income Tax Act should be initiated on the company in relation to period prior to acquisition of control by the resolution applicant over the Company pursuant to this plan shall stand extinguished by virtue of order of the National Company Law Tribunal and the assessee-company should not be liable to pay against such demand. 12. Since the present appeal involving AY 2010-11 relates to the period prior to the acquisition of control by the Resolution Applicant over the company pursuant to this plan, all dues under the provisions of the Income Tax Act 1961 including taxes, duty, penalties, interest fines, cesses, etc. shall stand extinguished by virtue of the order of the National Company Law Tribunal and all proceedings including the appellate proceedings pending on the date of the order of the National Company Law Tribunal including the present proceedings relating to the prior period to the date of order shall stand extinguished and all consequential liabilities, if any, should be deleted and should be considered to be not payable by the Company. In the light of the order of the National Company Law Tribunal (NCLT) dated 12.02.2018 passed in asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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