ABAN OFFSHORE LIMIED,CHENNAI vs. ACIT, NATIONAL E-CENTRE, DELHI

PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee-company directed against

the orders of the Deputy Commissioner of Income Tax, Corporate

Circle-1(1), Chennai passed u/s 143(3) r.w.s. 254 of the Income

Tax Act-1961 dated 23.12.2022 for the assessment year 2015-16.

Insolvency Resolution Proceedings (CIRP) are pending against the

assessee and as of now, Ld. National Company Law Appellate

Tribunal (NCLAT) is seized with the jurisdiction.

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 2 - :: 3. We have considered the issue in the light of the provisions of

Insolvency and Bankruptcy Code, 2016 (“the Code”) and the

decision of the Hon'ble Apex Court in the case of Ghanashyam

Mishra And Sons vs. Edelweiss Asset Reconstruction (2021) 126

taxmann.com 132 (SC). Under section 13 of the Code, the

adjudicating authority after admission of the application under

section 7 or 9 or 10 of the Code shall declare a moratorium which

shall include the prohibition of the institution of suits or

continuation of pending suits or proceedings against the corporate

debtor in any court of law or tribunal. In Ghanashyam Mishra And

Sons (supra), it was held that, (i) That once a resolution plan 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 Page - 2 - of 7

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 3 - :: resolution plan; (ii) 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 I&B Code has come into effect;

and (iii) 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.

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 Page - 3 - of 7

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 4 - :: being, this appeal cannot be proceeded with during the

continuance of the proceedings under the Code. However,

depending upon the result of such proceedings before the

adjudicating authority in respect of the corporate debtor,

appropriate steps if any, may be taken by the

appellant/respondent. We, therefore, granting leave to the

appellant in this appeal to seek the restoration of the appeal, if

necessitated by the orders in the Corporate Insolvency Resolution Proceedings, dismiss the appeal in limine. We also derive support

for the above proposition from the decision of the Jurisdictional

Bombay High Court in the case of Murli Industries Limited vs. ACIT

441 ITR 8 (Bom.). The Hon’ble Bombay High Court after referring

to the judgement of the Hon’ble Supreme Court in the case of

Ghanashyam Mishra And Sons (supra) held that on the date of

approval of the resolution plan by the Adjudicating Authority, all

such claims which are not a part of the resolution plan, shall stand

extinguished and no personnel shall be entitled to initiate or

continue any proceedings in respect to a claim, which is not a part

of the resolution plan by holding as under :-

“16. Ultimately, the Hon’ble Supreme Court has answered the questions framed in the following manner: Page - 4 - of 7

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 5 - :: “102.1. That once a resolution plan 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. 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 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.” 17. A careful reading of the above findings, would show that even a claim in respect of dues arising under any law for the time being in force, including claims under the Income Tax Act, 1961 which is payable to the Central Government or the State Government, would come within the ambit of Operational Creditors. Further, the claim of operational creditors will also include a claim of statutory authority like Income Tax Department on account of money receivable pursuant to an imposition by a statute. The Hon’ble Supreme Court has also upheld the view taken by the Rajasthan High Court holding that the demand notices issued by the Central Goods and Service Tax Department, for a period prior to the date on which NCLT has granted its approval to the Resolution Plan, are not permissible in law. The concluding remarks of the Hon’ble Apex Court are that, on the date of approval of the Resolution Plan by the Adjudicating Authority, all such claims which are not a part of the 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 a part of the Resolution Plan. The expression ‘that no person will be entitled to Page - 5 - of 7

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 6 - :: initiate any proceedings’ would include the proceedings in the nature of notice issued under Section 148 of the Income Tax Act, 1961. 18. As we understand from the above rulings, the aim and object of IBC is to revive the Corporate Debtor by putting quietus to the claims against it. Providing certainty to the Resolution Applicant of “no” claims in future against the Corporate Debtor appears to be the essence of the Resolution Plan. Such inference could further be substantiated on the ground that the provisions of the IBC (Section 238 of IBC) have an overriding effect, if there is any inconsistency with any of the provisions of the law for the time being in force, including the Income Tax Act, 1961. The Hon’ble Apex Court has also held that section 31 of the amended Act will have retrospective effect. 19. Having said so, it is now crystallized that the claims which were not a part of the Resolution Plan including recoverable statutory dues, shall stand extinguished upon approval of the Resolution Plan.” 5. In the present case also, it is not a case of the Department

that the claims which are part of subject matter of appeal are not

part of the resolution plan. Therefore, the ratio of the

Jurisdictional Bombay High Court in the case of Murli Industries

Limited (supra) is also squarely applicable to the facts of the

present case. Thus, the appeal filed by the assessee company

stands dismissed as not maintainable.

stands dismissed.

SA No.56/Chny/2024: Page - 6 - of 7

IT (TP)A 6/Chny/2023 (AY 2015-16) In SA No.56/Chny/2024 ABAN OFFSHORE LIMITED VS ACIT NATIONAL E-CENTRE :: - 7 - ::

maintainable, hence the SA No.56/Chny/2024 is become

infructuous.

stands dismissed. Order pronounced on the 19th day of December, 2025, in Chennai.

Sd/- Sd/- (मनु कुमार िग�र) (एस. आर. रघुनाथा) (MANU KUMAR GIRI) (S.R.RAGHUNATHA) �या�यक सद*य/JUDICIAL MEMBER लेखा सद*य/ACCOUNTANT MEMBER चे�नई/Chennai, +दनांक/Dated: 19 December, 2025. SNDP, Sr. PS आदेश क ��त,ल-प अ.े-षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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