FRUGAL DEVELOPERS P.LTD,NOIDA vs. ACIT, CENTRAL CIRCLE-27, NEW DELHI

PDF · subscribers
ITA 5757/DEL/2017Status: DisposedITAT Delhi08 May 2025AY 2011-12Bench: SHRI SHAMIM YAHYA (Accountant Member)3 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that demands relating to the period prior to the approval of the resolution plan are extinguished by operation of law, as per the Supreme Court's decision in Ghanashaym Mishra & Sons Private Limited.

What were the facts?

The assessee company was undergoing insolvency resolution proceedings under the IBC, and a resolution plan was approved. The revenue sought to enforce demands relating to a period prior to the approval of this plan.

What were the issues?

Whether tax liabilities predating the approval of an insolvency resolution plan are extinguished by law.

Which sections of the Income-tax Act were involved?

Section 31(1) of IBC

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “B” BENCH, DELHI

Before: SHRI SHAMIM YAHYA & SHRI SUDHIR PAREEK

For Appellant: Adv. & Ms
Hearing: 08.05.2025Pronounced: 08.05.2025
2.

The assessee before us is subjected to insolvency resolution proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), a resolution plan whereof was approved by the Committee of Creditors (COC) which was subsequently sanctioned by the Hon’ble National Company Law Tribunal (NCLT), conclusively concluding the insolvency proceedings under Section 31(1) of the IBC by and under its order dated 12.08.2024.

3.

The case of the assessee is this that the demand now sought to be enforced by the revenue relate to the period prior to the resolution plan’s approval is, therefore, extinguished by the operation of law as already decided by the Hon’ble Apex Court in the case of Ghanashaym Mishra & Sons Private Limited Vs. Edelweiss Asset Reconstruction Company Limited, reported in (2021) 9 SCC 657 wherein it has been held that all claims, including statutory dues, predating the resolution plan’s approval, stand extinguished. Thus, taking into consideration this particular aspect of the matter, the statutory dues, including tax liabilities, pertaining to the period before resolution plan approved cannot survive.

4.

It is contended by the Ld. Counsel appearing for the assessee that having regard to this particular aspect of the matter that the demand raised prior to the approval of the resolution plan are extinguished in terms of Section 31(1) of IBC the appeal becomes infructuous. Such submissions made by the ld. AR has not been controverted by the Ld. DR. 5. Having regard to the facts and circumstances of the matter and particularly the judgment passed by the Hon’ble Supreme Court in the case of Ghanashaym Mishra & Sons Private Limited Vs. Edelweiss Asset 2

Recent GST High Court judgments

Search GST case law →