COMMISSIONER OF INCOME TAX (CENTRAL) GURGAON vs. M/S BHUSHAN POWER & STEEL LTD.

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ITA/7/2016HC Punjab & HaryanaPHHC01110664201603 February 2025Bench: MRS. JUSTICE LISA GILL,MR. JUSTICE ALOK JAIN2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the appeal was virtually rendered infructuous. This was based on the submission by the Revenue that it would be bound by the resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code, 2016. The Court noted that the Corporate Insolvency Resolution Process had been initiated against the respondent, and a resolution plan had been approved by the NCLT and confirmed by the NCLAT. While the appeal was disposed of as infructuous, the Court granted liberty to the appellant (Revenue) to file an appropriate application if required, pursuant to any decision in Civil Appeal No.1808/2020 and other related appeals pending before the Supreme Court concerning the resolution plan. No specific issue was left undecided; rather, the appeal was disposed of on the basis of the subsequent events related to the insolvency proceedings.

What were the facts?

This case involves an appeal by the Pr. Commissioner of Income Tax-I (Central), Gurgaon (Revenue) against an order dated 16.06.2015 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh, in ITA No.1428/Chd/2010. The respondent is M/s Bhushan Power and Steel Limited. The High Court was informed that a Corporate Insolvency Resolution Process (CIRP) was initiated against the respondent under the Insolvency and Bankruptcy Code, 2016 (IBC, 2016). An Interim Resolution Professional was appointed, and a moratorium was imposed. A resolution plan submitted by JSW Steel Ltd. was approved by the National Company Law Tribunal (NCLT) and confirmed by the National Company Law Appellate Tribunal (NCLAT). The Revenue acknowledged that it would be bound by this resolution plan as per Section 31 of the IBC, 2016, rendering the present appeal virtually infructuous.

What were the issues?

1. Whether the present appeal is rendered infructuous in light of the approved resolution plan under the Insolvency and Bankruptcy Code, 2016, and the binding nature of such plans under Section 31 of the IBC, 2016. Assessee's contention: The assessee (respondent) did not explicitly argue any points as the appeal was deemed infructuous. However, the facts presented by the appellant indicate the pendency of the CIRP and the approval of a resolution plan. Revenue's contention: The Revenue, through its counsel, fairly stated that it would be bound by the resolution plan in terms of Section 31 of the IBC, 2016, and therefore, the present appeal is virtually rendered infructuous. However, it sought liberty to file an appropriate application if necessitated by the decision in certain pending Civil Appeals before the Supreme Court concerning the resolution plan.

Which sections of the Income-tax Act were involved?

Section 31

AI-generated summary — verify with the full judgment below

207-b IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH

ITA-7-2016

Date of Decision: February 03, 2025

Pr. Commissioner of Income Tax-I (Central), Gurgaon

.....Appellant

Versus

M/s Bhushan Power and Steel Limited, Chandigarh ..... Respondent

CORAM:- HON'BLE MRS. JUSTICE LISA GILL

HON'BLE MR. JUSTICE ALOK JAIN

Present: Mr. Yogesh Putney, Sr. Standing counsel with

Mr. Vaibhav Gupta, Advocate for the appellant.

Mr. Vishal Gupta, Advocate for the respondent.

**** LISA GILL, J. 1.

Prayer in this appeal is for setting aside order dated 16.06.2015, passed by learned Income Tax Appellate Tribunal, Chandigarh, in ITA No.1428/Chd/2010. 2.

It is brought to our notice that Corporate Insolvency Resolution Process (for short CIRP) was initiated against respondent on an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short IBC, 2016) by the Punjab National Bank. Interim Resolution Professional was appointed vide order dated 26.07.2017. Moratorium was imposed vide the said order. Statement of claim was filed by appellant as well, before the RP/IRP. Resolution plan dated 08.02.2018 submitted by one JSW Steel Ltd. was RITU SHARMA 2025.02.05 14:48 I attest to the accuracy and integrity of this document

ITA-7-2016

-2-

approved by learned National Company Law Tribunal, New Delhi (NCLT) on 05.09.2019. Said order was confirmed by learned National Company Law Appellate Tribunal (NCLAT) on 17.02.2020. 3.

Learned counsel for appellant fairly states that appellant would be bound by the resolution plan in terms of Section 31 of IBC, 2016, therefore, present appeal is virtually rendered infructuous. However, it is submitted that Civil Appeal No.1808/2020 and some others are pending adjudication before Hon’ble the Supreme Court in respect to the resolution plan. Therefore, liberty be afforded to appellant to file appropriate application if necessitated by the decision in pending appeals before Hon’ble the Supreme Court qua the resolution plan. 4. Keeping in view the facts and circumstances as above, appeal is disposed of as infructuous with liberty to the appellant to file appropriate application, if at all and as may be required, pursuant to decision of Hon’ble the Supreme Court in the above said pending appeals.

(LISA GILL)

JUDGE

(ALOK JAIN) February 03, 2025

JUDGE Rts

Whether speaking/reasoned: Yes/No

Whether reportable: Yes/No

RITU SHARMA 2025.02.05 14:48 I attest to the accuracy and integrity of this document

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