RAMANAGARAM ENTERPRISES PRIVATE LIMITED,HYDERABAD vs. ACIT., CIRCLE-16(1), HYDERABAD

Facts

Ramanagaram Enterprises Pvt. Ltd., engaged in hydropower, faced additions under Section 14A after filing returns for AY 2017-18 and 2018-19. Concurrently, the company underwent a Corporate Insolvency Resolution Process (CIRP) under IBC, 2016, with an NCLT-approved resolution plan that included the Income Tax Department's claim for AY 2017-18. The CIT(A) dismissed the company's appeals in limine, deeming them non-maintainable post-NCLT resolution.

Held

The Tribunal set aside the CIT(A)'s dismissal, ruling that while an approved NCLT resolution plan extinguishes prior claims not included, the Assessing Officer (AO) must pass a consequential order under Section 156A of the Income Tax Act, 1961. The matter was remanded to the AO to give effect to the NCLT's order and the Supreme Court's pronouncements regarding the binding nature of resolution plans.

Key Issues

The core issue was the maintainability of income tax appeals and the binding nature of an NCLT-approved resolution plan under the IBC, 2016, on Income Tax Department claims, and the consequential action required from the tax authorities.