ACIT, NEW DELHI vs. M/S SAHARA AIRLINES LTD (NOW KNOWN AS M/S. JET LITE INDIA LTD.), NEW DELHI

ITA 776/DEL/2009Status: DisposedITAT Delhi29 September 2026AY 2001-0212 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that once a resolution plan is duly approved by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code, 2016, the claims as provided in the resolution plan become frozen and binding on all stakeholders, including the Central Government. Any claims not part of the resolution plan stand extinguished, and no person can initiate or continue proceedings for such claims. This principle applies to all dues, including statutory dues owed to the Central Government, if they are not part of the resolution plan. The Tribunal cited the Supreme Court's decisions in Ghanshyam Mishra and Essar Steel India Limited, and High Court decisions in TUF Metallurgical Pvt. Ltd. and Subhlabh Steels (P.) Ltd. to support this view. Consequently, the appeals filed by the Department were dismissed, as the tax claims pertaining to the assessment years involved were deemed to have been extinguished upon the approval of the resolution plan, as no such claims were part of the plan.

What were the facts?

The appeals were filed by the Revenue against the orders of the Commissioner of Income Tax (Appeals) concerning Sahara Airlines Ltd. (now Jet Lite (India) Ltd.) for assessment years 1998-99 to 2006-07. The Revenue challenged the deletion of additions made by the Assessing Officer, alleging tax evasion through false expenditure. The assessee, Sahara Airlines Ltd., underwent a Corporate Insolvency Resolution Process (CIRP) which commenced on June 20, 2019. A resolution plan was approved by the Committee of Creditors on October 17, 2020, and by the NCLT on June 22, 2021. However, due to non-implementation, the Supreme Court directed liquidation on November 7, 2024, with NCLT ordering liquidation on November 26, 2024. The judgment notes that there is no record of any admitted claim by the Income Tax Department in either the resolution or liquidation proceedings.

What were the issues?

1. Whether the claims of the Revenue for the assessment years in dispute stand extinguished upon the approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016, even if such claims were not part of the resolution plan? (Question of law, turning on Section 31 of the IBC, 2016). Assessee's Contention: The assessee argued that once a resolution plan is approved by the Adjudicating Authority, all claims not included in the plan stand extinguished and no proceedings can be continued for such claims. They relied on the principles laid down in Ghanshyam Mishra and Essar Steel India Limited cases, and decisions of the Delhi and Calcutta High Courts. Revenue's Contention: The Revenue primarily challenged the additions on merits, as stated in paragraph 3. However, the judgment indicates that the Revenue's appeals were dismissed based on the CIRP proceedings. No specific arguments were recorded for the Revenue regarding the extinguishment of claims in the context of the CIRP.

Which sections of the Income-tax Act were involved?

Section 31,Section 143(3),Section 144,Section 271D

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Heard together (2 matters)

ITA No.776/Del/2009
C.O. No.72/LKN/2005

Read from the judgment's own cause title. This page is filed under one of them.

INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI BENCH: F

BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER

ITA Nos. 2471, 2473 to 2475, 3128, 2992/DEL/2011 (निर्धारण वर्ा/Assessment Years: 2004-05 to 2006-07) DCIT SAHARA AIRLINES LTD. CENTRAL CIRCLE-6, ROOM (NOW KNOWN AS JET LITE NO. 334, ARA CENTRE, (INDIA) LTD.), A- 110, JHANDEWALAN EXTN., NEW ROAD NO. 5, NH- 8, Vs. DELHI-, DELHI MAHIPALPUR EXTENSION NEW DELHI-, DELHI अपीलधर्थी Appellant प्रत्यर्थी Respondent Permanent Account Number of AADCS4480L Assessee: DCIT SAHARA AIRLINES LTD. CENTRAL CIRCLE-6, ROOM (NOW KNOWN AS JET LITE NO. 334, ARA CENTRE, (INDIA) LTD.), Jet Air JHANDEWALAN EXTN., NEW Vs. House,-13, Community DELHI-, DELHI Centre, Yusuf Sarai, NEW DELHI-, DELHI अपीलधर्थी Appellant प्रत्यर्थी Respondent Permanent Account Number of AADCS4480L Assessee:

10 Appeals SAHARA AIRLINES LTD. DCIT, CENTRAL CIRCLE-1, अपीलधर्थी Appellant प्रत्यर्थी Respondent Permanent Account Number of AADCS4480L Assessee:

C.O. No.72/LKN/2005 (निर्धारण वर्ा/Assessment Year: 1998-1999) SAHARA AIRLINES LTD DCI

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