Empee Distilleries Limited vs. The Assistant Commissioner of Income Tax

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TCA/187/2025HC Madras26 November 2025Bench: Honourable The CHIEF JUSTICE8 pages
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What did the High Court hold?

The High Court held that the substantial questions of law are decided in favour of the assessee and against the revenue. The Court relied on the authoritative pronouncement of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited. The Supreme Court held that once a resolution plan is approved by the adjudicating authority under Section 31 of the IBC, all claims not part of the resolution plan stand extinguished and no person can initiate or continue proceedings in respect of such claims. Consequently, all dues, including statutory dues, owed to the government, if not part of the resolution plan, stand extinguished. The High Court noted that the revenue had submitted an application before the NCLT, but the claim was neither accepted nor rejected, and no further proceedings were taken against the NCLT order. Therefore, the Resolution Plan approved by the NCLT has attained finality. In light of the Supreme Court's decision, all claims towards tax liability for the assessment years 2008-2009, 2009-2010, and 2010-2011 stand extinguished against the assessee. The revenue is not at liberty to institute any recovery proceedings against the appellant. The appeals are allowed.

What were the facts?

The appeals by Empee Distilleries Limited (assessee) are against the orders of the Income Tax Appellate Tribunal (ITAT) dated 16.06.2025, which dismissed Miscellaneous Applications (M.A.Nos.13, 14, and 15 of 2023) filed in ITA Nos.2334, 2335, and 2336 of 2017 respectively. These appeals before the High Court are filed under Section 260A of the Income Tax Act, 1961. The dispute pertains to assessment orders and orders of the CIT(A) for assessment years 2008-2009, 2009-2010, and 2010-2011. The core issue arises from the approval of a Resolution Plan by the National Company Law Tribunal (NCLT) on 20.01.2020, subsequent to the filing of appeals before the ITAT by the erstwhile management on 16.09.2017.

What were the issues?

The High Court had to decide the following substantial questions of law: 1. Whether the ITAT had jurisdiction to decide appeals filed by the erstwhile management after the approval of a Resolution Plan by the NCLT. 2. Whether the orders of the CIT(A) dated 28.07.2017 and the original assessment order dated 31.12.2010 would survive upon the approval of a Resolution Plan by the NCLT. 3. Whether the jurisdiction and powers of the ITAT cease upon the approval of a Resolution Plan by the NCLT concerning one of the parties. 4. Whether pending proceedings and demands related to periods prior to the Resolution Plan's approval, if not part of the plan, would stand extinguished upon its approval. 5. Whether the ITAT was justified in refusing to exercise its jurisdiction under Section 254(2) of the Income Tax Act, 1961, despite being informed about the Resolution Plan under the IBC. Assessee's Contention: The assessee argued that upon the approval of the Resolution Plan by the NCLT, any claim for recovery of tax from the appellant stands extinguished, a fact not considered by the ITAT. The assessee relied on the Supreme Court's decision in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited. Revenue's Contention: The revenue stated that an application was submitted before the NCLT, but the claim was neither accepted nor rejected. No further proceedings were taken against the NCLT order.

Which sections of the Income-tax Act were involved?

Section 260A,Section 254(2),Section 31

AI-generated summary — verify with the full judgment below

T.C.A.Nos.187, 188 and 189 of 2025 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.11.2025 CORAM : THE HONOURABLE MR. MANINDRA MOHAN SHRIVASTAVA, CHIEF JUSTICE AND THE HONOURABLE MR.JUSTICE G.ARUL MURUGAN T.C.A.Nos.187, 188 and 189 of 2025 and C.M.P.Nos.23608, 23615 and 23644 of 2025 Empee Distilleries Limited Rep. by its Authorised Signatory Alfred Sagaya Sunder Xavier No.72, Greams Road, Thousand Lights, Anna Salai, Chennai - 600 006 Appellant in all appeals Vs The Assistant Commissioner of Income Tax Company Range II, Chennai presently Corporate Circle 2(1), Chennai 600 034 Respondent in all appeals PRAYER in TCA No.187 of 2025: Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal “B” Bench, Chennai, dated 16.06.2025 in M.A.No.13/Chny/2023 in I.T.A.No.2334/Chny/2017. ______________ Page 1 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 PRAYER in TCA No.188 of 2025: Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal “B” Bench, Chennai, dated 16.06.2025 in M.A.No.14/Chny/2023 in I.T.A.No.2335/Chny/2017. PRAYER in TCA No.189 of 2025: Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal “B” Bench, Chennai, dated 16.06.2025 in M.A.No.15/Chny/2023 in I.T.A.No.2336/Chny/2017. For Appellant: Mr.Karthik Lakshmanan Arunachalam For Respondent: Mr.T.Ravi Kumar Senior Standing Counsel COMMON JUDGMENT (Order of the Court was made by the Hon'ble Chief Justice) Heard. 2. These appeals were admitted on the following substantial questions of law: (1) Whether the Tribunal was conferred with jurisdiction to decide the appeal filed by the erstwhile management on 16.9.2017 (prior to CIRP) upon approval of Resolution Plan by the Adjudicating Authority (AA) i.e., National Company Law Tribunal ______________ Page 2 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 (NCLT) on 20.01.2020 in the case of the appellant company? (2) Whether the order impugned in the appeal before the Tribunal i.e., the order of the CIT(A) dated 28.07.2017 and the original assessment order dated 31.12.2010 passed by the Assessing Officer (AO) which was subject matter of challenge in the appeal pending before the CIT (A) would survive upon a Resolution Plan being approved by the AA on 20.01.2020? (3) Whether the jurisdiction and powers conferred on the Tribunal ceases upon approval of a Resolution Plan by the AA against one of the parties? (4) Whether pending proceedings and/or demands subject matter of such pending proceedings before the Tribunal relating to the period prior to the approval of the Resolution Plan by the AA not being part of the Resolution Plan approved by the AA would survive or would stand extinguished upon approval of the Resolution Plan by the AA? (5) Whether the Tribunal was justified in law in refusing to exercise its jurisdiction under Section ______________ Page 3 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 254(2) of the Income Tax Act, 1961 even though preparation of the Resolution Plan under Insolvency and Bankruptcy Code (IBC) was brought to its notice? 3. On the date when the appeals were admitted by this Court, it was brought to the notice of this Court that, in view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of Ghanashyam Mishra and Sons Private Limited, through the Authorised Signatory v. Edelweiss Asset Reconstruction Company Limited, through the Director and others1, upon approval of the resolution plan, the claim, if any, of recovery of any tax from the appellant stands extinguished and this aspect was not taken into consideration by the Tribunal even when application seeking rectification was filed, which eventually came to be dismissed on 16.6.2025. 4. The decision of the Hon'ble Supreme Court in the case of Ghanashyam Mishra (supra) concludes the issue arising for consideration on the questions posed before us. It is felicitous to reproduce the following observations: “102.1. That once a resolution plan is duly approved by 1(2021) 9 SC C 657 ______________ Page 4 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 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. ... 102.3. 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.” 5. It is, thus, apparently clear that once the resolution plan is approved, the claim, unless saved under the resolution plan, comes to an end and ceases to be enforceable. 6. In order to find out whether the Revenue had submitted any ______________ Page 5 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 application in the resolution proceedings before the National Company Law Tribunal (NCLT), learned counsel for the Revenue was granted time. All that learned counsel for the Revenue has to say before this Court is that, though application was submitted before NCLT, the claim was neither accepted, nor rejected. 7. It was again enquired whether against the order passed by the NCLT any appeal was preferred before the National Company Law Appellate Tribunal (NCLAT) or any other Court. On this aspect, learned counsel for the Revenue submits that no further proceedings were taken. 8. It is, thus, clear that the resolution plan, as approved by the NCLT, has attained finality. Accordingly, in view of the decision of the Hon'ble Supreme Court in the case of Ghanashyam Mishra (supra), all the claims towards the tax liability also stand extinguished as against the assessee arising from the assessment orders passed by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal pertaining to the Assessment Years 2008-2009; 2009-2010 and 2010-2011. 9. Therefore, the questions of law framed by us are decided in ______________ Page 6 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 favour of the assessee and against the revenue. It is held that it will not be open for the revenue to institute any recovery proceedings against the appellant in view of approval of the resolution plan by the NCLT. 10. The appeals are, accordingly, allowed. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. (MANINDRA MOHAN SHRIVASTAVA, CJ) (G.ARUL MURUGAN,J)

26.11.2025 Index : Yes/No Neutral Citation : Yes/No bbr To: 1. The Assistant Registrar Income Tax Appellate Tribunal Chennai Benches, Chennai. 2. The Commissioner of Income Tax (Appeals)-9 Chennai. 3. The Assistant Commissioner of Income Tax, Company Range II, Chennai presently Corporate Circle 2(1), Chennai-600 034. ______________ Page 7 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm ) T.C.A.Nos.187, 188 and 189 of 2025 THE HON'BLE CHIEF JUSTICE AND G.ARUL MURUGAN,J. bbr T.C.A.Nos.187, 188 and 189 of 2025

26.11.2025 ______________ Page 8 of 8 https://www.mhc.tn.gov.in/judis ( Uploaded on: 28/11/2025 06:21:58 pm )

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