TMI Blog2024 (4) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... aceless procedure of assessment as prescribed therein. Any effort to assess, reassess or re-compute could tend to lean towards a re-computation of liabilities which otherwise stands freezed by virtue of the Resolution Plan having been approved. Such an action or recourse would clearly be barred by Section 31 of the IBC which binds all creditors of the corporate debtor, including the Central and State Governments or any other local authority to whom a debt is owed. A Section 144B action is what the Supreme Court frowned upon and chose to describe as the hydra head and thus being contrary to the clean slate principle which the IBC advocates. We, consequently, find ourselves unable to sustain the impugned action. We find ourselves unable to sustain that line of reasoning bearing in mind the undisputable legal position which obtains in light of the scheme of the IBC and which fails to incorporate any distinction between voluntary and involuntary corporate insolvency. As we read the provisions of the Act, the IBC does not erect different levels of protection or insulation dependent upon whether corporate insolvency had been initiated voluntarily or on the basis of a petition referable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory scheme of the IBC, the Corporate Insolvency Resolution Process [CIRP] would also be deemed to have commenced from the aforesaid date. 4. According to the writ petitioner, the Resolution Professional [RP] appointed pursuant to the commencement of CIRP, on 23 November 2020, informed the Income Tax authorities of the pendency of proceedings before the NCLT. This was followed by a communication dated 28 January 2021 in terms of which the RP is stated to have conveyed a request to the Income Tax authorities to lodge their claims in accordance with the provisions of the IBC. 5. The petitioner, in terms of the provisions of the Act, furnished its Return of Income [ROI] for AY 2021-22 on 10 March 2022 declaring a net loss of INR 9,47,64,300/-. The CIRP proceedings in the meanwhile culminated in the approval of the Resolution Plan being approved by the NCLT on 15 March 2022 and accepting a plan submitted by M/s Sarthi Constructions which had been accepted by the Committee of Creditors. It is only thereafter and on 27 June 2022 that the respondents chose to commence proceedings referable to Section 144B of the Act. 6. The fact that a Resolution Plan once approved would bring the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs would squarely cover the Central Government, any State Government or any local authorities. The legislature noticing that on account of obvious omission certain tax authorities were not abiding by the mandate of the I B Code and continuing with the proceedings, has brought out the 2019 Amendment so as to cure the said mischief. We therefore hold that the 2019 Amendment is declaratory and clarificatory in nature and therefore retrospective in operation. 4. We also take note of the identical position which was expressed by the Supreme Court in Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta, [(2020) 8 SCC 531] where the following pertinent observations came to be made:- 105. Section 31(1) of the Code makes it clear that once a resolution plan is approved by the Committee of Creditors it shall be binding on all stakeholders, including guarantors. This is for the reason that this provision ensures that the successful resolution applicant starts running the business of the corporate debtor on a fresh slate as it were . In SBI v. V. Ramakrishnan, (2018) 17 SCC 394, this Court relying upon Section 31 of the Code has held: 25. Section 31 of the Act was also strongly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment must also be set aside on this count. 5. In view of the aforesaid principles, the successful resolution applicant cannot be foisted with any liabilities other than those which are specified and factored in the Resolution Plan and which may pertain to a period prior to the resolution plan itself having been approved. 8. The Section 144B power entails proceedings for assessment, reassessment or re-computation being initiated in terms of the faceless procedure of assessment as prescribed therein. Any effort to assess, reassess or re-compute could tend to lean towards a re-computation of liabilities which otherwise stands freezed by virtue of the Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on a clean slate and is not flung with any surprise claims. 29. The resolution plan submitted on behalf of the petitioners by the Insolvency Resolution Professional under Section 30(6) of the Insolvency and Bankruptcy Code, 2016 on May 21, 2019 has not contemplated any concession from the Income-tax Department though notices under Section 148 of the Income-tax Act, 1961 had already been issued during March, 2018. 30. Corporate Insolvency resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC) did not contemplate tax dues under the Income-tax Act, 1961. Further, at the stage, the proceedings under 148 of the Act, 1961 had not crystallized. 31. The objections of the respective petitioners were also not in the light of the voluntary corporate insolvency resolution proceedings initiated by the petitioners. 32. Since the proceedings under the Code were initiated by the petitioners few days prior to the initiation of the proceedings under Section 148 of the Income-tax Act, 1961, it was incumbent for the petitioners to have ensured proper notice to the Income-tax Department and obtained appropriate concession in Corporate Insolvency Resolution Plan. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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