UNNATI FORTUNE INDUSTRIES PRIVATE LIMITED vs. INCOME TAX DEPARTMENT & ORS.

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W.P.(C)/10066/2023HC DelhiDLHC01029199202302 December 2024Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE DR. JUSTICE SWARANA KANTA SHARMA2 pages
AI SummaryAllowed

What did the High Court hold?

The Delhi High Court allowed the writ petition and set aside the impugned notice of demand dated May 26, 2023, issued under Section 156 of the Income Tax Act, 1961, for assessment year 2013-14. The Court reasoned that the petitioner had undergone a Corporate Insolvency Resolution Process, and its Resolution Plan was approved by the National Company Law Tribunal on July 1, 2020. Following the Supreme Court's decision in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., all dues not reflected in the approved Resolution Plan are unrecoverable. Consequently, any notice levying penalty for non-payment of the demand was also set aside. The petition was disposed of in these terms.

What were the facts?

The petitioner, Unnati Fortune Industries Private Limited, filed a writ petition challenging a notice of demand dated May 26, 2023, issued under Section 156 of the Income Tax Act, 1961, for assessment year 2013-14, amounting to ₹30,93,709. The petitioner also challenged a penalty notice dated May 26, 2023, issued under Section 274 read with Section 271(1)(b) of the Act. The petitioner had undergone a Corporate Insolvency Resolution Process, and its Resolution Plan was approved by the National Company Law Tribunal on July 1, 2020. The petitioner contended that all dues not reflected in the approved Resolution Plan were unrecoverable, citing the Supreme Court decision in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd.

What were the issues?

1. Whether the notice of demand dated May 26, 2023, issued under Section 156 of the Income Tax Act, 1961, for assessment year 2013-14, is valid, considering the approved Resolution Plan under the Corporate Insolvency Resolution Process. Assessee's Contention: The assessee argued that following the approval of its Resolution Plan by the National Company Law Tribunal on July 1, 2020, all dues not reflected in the plan are unrecoverable, relying on the Supreme Court's decision in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. Revenue's Contention: The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 156,Section 274,Section 271(1)(b)

AI-generated summary — verify with the full judgment below

$~93 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 10066/2023, CM APPL. 38730/2023 & CM APPL. 60252/2023

UNNATI FORTUNE INDUSTRIES PRIVATE LIMITED

.....Petitioner Through: Ms. Maulshree Pathak & Mr. Harshit Pandey, Advocates.

versus

INCOME TAX DEPARTMENT & ORS.

.....Respondents Through: Mr. Puneett Singhal & Ms. Priya Sarkar, Standing Counsels for ITD

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MS. JUSTICE SWARANA KANTA SHARMA

O R D E R %

02.12.2024 1. The petitioner has filed the present petition, inter-alia, impugning a notice of demand dated 26.05.2023 issued under Section 156 of the Income Tax Act, 1961 (hereafter the Act) as well as a penalty notice dated 26.05.2023, issued under Section 274 read with Section 271(1)(b) of the Act. 2. A plain reading of the notice of demand issued under Section 156 of the Act, for a sum of ₹30,93,709/-, indicates that the same is in respect of assessment year 2013-14. Admittedly, the petitioner had undergone a Corporate Insolvency Resolution Process and by an order dated 01.07.2020, the learned National Company Law Tribunal had approved the Resolution Plan filed by One City Infrastructure Private Limited. Concededly, all dues This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/12/2024 at 12:53:30

which were not reflected in the approved Resolution Plan are now unrecoverable. The said issue is covered by the decision of Hon’ble Supreme Court in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd through the Director and Others: (2021) 9 SCC 657. 3. In view of the above, the present petition is allowed and the impugned notice of demand is set aside. Consequently, any notice levying penalty for non-payment of the said amount is also set aside. 4. The petition is disposed of in the aforesaid terms. All pending applications are also disposed of.

VIBHU BAKHRU, J

SWARANA KANTA SHARMA, J DECEMBER 02, 2024/at Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/12/2024 at 12:53:30

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