TMI Blog2024 (3) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... f dues arising under any law for the time being in force. The Hon ble Supreme Court in the matter of Ghanashyam Mishra [ 2021 (4) TMI 613 - SUPREME COURT] has considered the scope of Section 31 (1) of the IBC and has held that once the resolution plan is sanctioned under Section 31(1) of the IBC, the claims provided in the plan will stand frozen and all such claims which are not part of the plan will stand extinguished. Thus, the law is well settled that on the approval of the resolution plan in terms of Section 31 of the IBC, the dues including the statutory dues of the Government or local authority, if not part of the resolution plan, gets extinguished and no proceedings in respect thereof for a period prior to the date of approval under Section 31 would continue. The decision of the Hon ble Calcutta HighCourt in West Bengal State Electricity Distribution Company Limited vs. Sri Vasavi Industries Limited [ 2022 (7) TMI 580 - CALCUTTA HIGH COURT] makes it clear that any claim not made during the course of CIRP and before approval of resolution plan shall automatically be extinguished and the corporate debtor is deemed to start its operations with a clean slate after the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the order of the ld. Income-tax Officer, Ward-3(3), Kolkata (in brevity the AO ) passed u/s 143(3) of the Act dated 21.03.2015. 2. The assessee has taken the following grounds of appeal: 1. That the order passed by the Ld. CIT(A)-17, Kolkata u/s 250 confirming the additions and disallowances made by Learned Assessing Officer is wrong in the law and facts of the case. 2. That the Ld. CIT(A) erred in law as well as on facts of the case by confirming the addition of Rs. 83750000/- made by the AO u/s 68 of the Act while treating the same as assessee s own money. 3. That the appellant craves to leave, add or amend any of the grounds during the course of appellant proceedings. 3. The Registry has informed us that the appeal was filed with a delay of 18 days. The assessee submitted the condonation petition, and the reasonis described that the assessee was ill due to injury of left shoulder, so the delay was caused for 18 days. The Ld. D.R had not made any objection for condoning of delay. Accordingly, we condone the delay of eighteen (18) days. 4. Brief fact of the case is that the assessment was framed u/s 143(3) of the Act against the assessee with an addition amount to Rs. 83,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the corporate debtor. v. The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period. vi. The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. vii. The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process. viii. Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. ix. Necessary public announcement as per Section 15 of the IBC, 2016 may be made. x. Shri Ashok Kumar Sarawagi, IP Registration No. IBBI/IPA-001/IPP00171/ 2017-18/10340 email id sarawagiashok@gmail.com is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 27.10.2021 . The relevant paragraph is also reproduced hereinbelow: 10. In the case of Ghanashyam Mishra Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/166 SCL 237, 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, guarantors and other stakeholders. The said section 31 was subsequently amended in 2019 to clarify that the term other stakeholders include Central Government, State Government, and other local bodies, and this amendment has been held by the Courts as having retrospective effect being clarificatory and declaratory in nature. 11. Keeping in view the legal position emanating from the discussion made above in the light of judicial pronouncements of the Hon'ble Supreme Court, it is thus clear that the order passed by the National Company Law Tribunal under section 31 of the Insolvency and Bankruptcy Code, 2016 has overriding effect over anything inconsistent contained in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uished 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 12-2-2018 passed in assessee's case, we deem it fit to restore the case for the assessment year under consideration before us to Assessing Officer for taking necessary action in accordance with law. 13. In the result, the appeal of the assessee is treated as allowed for statistical purposes as indicated above. 8. The Ld. D.R fully relied on the order of revenue authorities and not made any adverse comment against the submission of the assessee. 9. We heard the rival submission and considered the documents available in the record. The operational creditor of assessee has filed the petition before the NCLT and as per the assessee s own case for its CRIP as per rule 4 of Insolvency Bankruptcy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. Explanation-For the purposes of this sub-section, it is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan 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 not part of the resolution plan. 102.2. The 2019 Amendment to Section 31 of the I B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the I B Code has come into effect. 102.3. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in Civil Appeal No. 447-448 of 2013 , after taking note of the judgment of Ghanashyam Mishra (supra), the Hon ble Court held that: Admittedly, the claim in respect of the demand which is the subject matter of the present proceedings was not lodged by the respondent no. 2 after public announcements were issued under Sections 13 and 15 of the IBC. /4s such, on the date on which the Resolution Plan was , approved by the learned NCLT, all claims stood frozen, and no claim, which is not a part of the Resolution Plan, would survive. In that view of the matter, the appeals deserve to be allowed only on this ground. It is held that the claim of the respondent, which is not part ofthe Resolution Plan, does not survive. The amount deposited by the appellant at the time of admission of appeals along with interest accrued thereon is directed to be refunded to the appellant. 9.5. Thus, the law is well settled that on the approval of the resolution plan in terms of Section 31 of the IBC, the dues including the statutory dues of the Government or local authority, if not part of the resolution plan, gets extinguished and no proceedings in respect thereof for a period prior to the date of appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd or giving effect of any order. It is well settled now that IBC has an overriding effect on all the acts including Income Tax Act which has been specifically provided u/s 178(6) of the I.T. Act as amended w.e.f. 01.11.2016. 9.9. A reading of the provisions under section 13 and 14 of the Code along with the decision in Ghanashyam Mishra And Sons (supra), clearly shows that once the proceedings have commenced by institution of application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings is prohibited and when once they reach the logical conclusion with due approval of the resolution plan 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. At any rate, for the time being, this appeal cannot be proceeded with during the continuation of the proceedings under the Code. 9.10. However, depending upon the result of such proceedings before the adjudicating authority in respect of the ..... 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