PATNA HIGHWAY PROJECTS LIMITED vs. INCOME TAX DEPARTMENT, REPRESENTED THROUGH THE JURISDICTIONAL ASSESSING OFFICER CIRCLE 19 2 DELHI
What did the High Court hold?
The Delhi High Court held that the impugned tax demand notices are unrecoverable. The Court reasoned that the demands pertain to the period prior to the cut-off date, which is a well-established principle under the Insolvency and Bankruptcy Code, 2016. It is settled law that all claims for the period prior to the cut-off date under an approved Resolution Plan are extinguished, unless expressly included in the plan. The Court found that this issue is squarely covered by the decision of the Hon'ble Supreme Court in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. Consequently, the Court set aside the impugned demand notices and allowed the petitions. No issues were left undecided.
What were the facts?
Patna Highway Projects Limited (the petitioner) filed multiple writ petitions before the Delhi High Court. These petitions challenged notices of tax demand issued by the Income Tax Department. The demands pertained to periods prior to the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016. The petitioner had undergone a Corporate Insolvency Resolution Process, and the Resolution Plan was approved by the National Company Law Tribunal. The core of the dispute is that the impugned tax demands are for periods preceding the 'cut-off date' as defined in the Resolution Plan.
What were the issues?
1. Whether the tax demands pertaining to the period prior to the approval of the Resolution Plan are recoverable, given that they are for a period before the cut-off date. The Assessee (Petitioner) contended that the impugned demands are unrecoverable as they relate to the period prior to the cut-off date. They argued that it is well-settled that all claims for the period prior to the cut-off date under a Resolution Plan stand extinguished unless specifically included. The Assessee relied on the Supreme Court's decision in Ghanashyam Mishra and Sons Private Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. The Revenue (Respondent) did not dispute that the impugned demand is unrecoverable as it pertains to the period prior to the cut-off date. The judgment does not record any specific arguments made by the Revenue beyond this concession.
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$~94 to 97 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6133/2024 & CM APPL. 25515/2024
PATNA HIGHWAY PROJECTS LIMITED .....Petitioner Through: Mr. Gopal Jain, Mr. Mehul Parti & Ms. Harshita Malik, Advocates.
versus
INCOME TAX DEPARTMENT, REPRESENTED THROUGH THE JURISDICTIONAL ASSESSING OFFICER CIRCLE 19 2 DELHI .....Respondent Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, JSC & Mr. Abhishek Anand, Advocate.
95 + W.P.(C) 6134/2024 & CM APPL. 25518/2024
PATNA HIGHWAY PROJECTS LIMITED .....Petitioner Through: Mr. Gopal Jain, Mr. Mehul Parti & Ms. Harshita Malik, Advocates.
versus
INCOME TAX DEPARTMENT, REPRESENTED THROUGH THE JURISDICTIONAL ASSESSING OFFICER CIRCLE 19 1)DELHI & ANR.
.....Respondents Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, JSC & Mr. Abhishek Anand, Advocate.
96 + W.P.(C) 6135/2024 & CM APPL. 25521/2024
PATNA HIGHWAY PROJECTS LIMITED .....Petitioner Through: Mr. Gopal Jain, Mr. Mehul Parti & Ms. Harshita Malik, Advocates. 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 12:52:24
versus
INCOME TAX DEPARTMENT REPRESENTED THROUGH THE NATIONAL FACELESS ASSESSMENT CENTRE DELHI .....Respondent Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, JSC & Mr. Abhishek Anand, Advocate. 97 + W.P.(C) 6136/2024 & CM APPL. 25524/2024
PATNA HIGHWAY PROJECTS LIMITED .....Petitioner Through: Mr. Gopal Jain, Mr. Mehul Parti & Ms. Harshita Malik, Advocates.
versus
INCOME TAX DEPARTMENT, REPRESENTED THROUGH THE JURISDICTIONAL ASSESSING OFFICER CIRCLE 19 2 DELHI & ORS.
.....Respondents Through: Mr. Ruchir Bhatia, SSC with Mr. Anant Mann, JSC & Mr. Abhishek Anand, Advocate.
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 petitions, inter-alia, impugning the notices of tax demand, pertaining to the period prior to the approval of the Resolution Plan. The petitioner had undergone a Corporate Insolvency Resolution Process under the provisions of the Insolvency and Bankruptcy Code, 2016. 2. The Resolution Professional had filed an application before the 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 12:52:24
learned National Company Law Tribunal for approval of the Resolution Plan, and the same was allowed. 3. Concededly, the impugned demand is unrecoverable as it pertains to the period prior to the cut-off date. It is well settled that all claims for the period prior to the cut-off date under the Resolution Plan, would stand extinguished, unless the same are specifically included in the Resolution Plan. 4. It is also not disputed that the issue stands fully covered by the decision of the 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. 5. In view of the above, the impugned demand notices are set aside. The petitions are allowed in the aforesaid terms.
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 12:52:24
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