M TECH DEVELOPERS PVT. LTD.,NEW DELHI vs. DCIT, CIRCLE- 16(1), NEW DELHI

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ITA 1597/DEL/2018Status: DisposedITAT Delhi24 April 2023AY 2014-155 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The ITAT decided to restore the appeals and cross-objections to the file of the Assessing Officer. The AO is directed to decide the issues in light of the NCLT's approved resolution plan and the Supreme Court's ruling in Ghanshyam Mishra & Sons Pvt. Ltd.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) dealt with appeals concerning M Tech Developers Pvt. Ltd. The National Company Law Tribunal (NCLT) had approved a resolution plan for the assessee company. The ITAT noted that similar matters for previous assessment years had been restored to the Assessing Officer (AO) for decision as per the NCLT order.

What were the issues?

Whether tax claims are extinguished upon the approval of a resolution plan by the NCLT, and how to proceed with tax appeals in such circumstances.

Which sections of the Income-tax Act were involved?

Section 31

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI

Before: SHRI NARENDRA KUMAR BILLAIYA & SHRI ANUBHAV SHARMA

For Appellant: Adv. &, Ms. Tanya Adv
For Respondent: Ms. Sarita Kumari CIT(DR)
Pronounced: 24.04.2023

Heard together (4 matters)

ITA no. 1597/Del/2018
ITA 7861/Del/2018
ITA 4386/Del/2017
CO no. 203/Del/2017

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R PER ANUBHAV SHARMA, JM:

Heard and perused the record.

2.

In regard to A.Y. 2014-15, adjournment application was moved as ld. Sr. DR is on medical leave. However, on brief hearing it was found that in regard to the assessee company the NCLT, Principal Bench, New Delhi, vide order dated 15.03.2022 has approved Resolution Plan, hence no effective hearing in the appeal is required. Therefore, the request for adjournment was declined.

3.

Admittedly in assessee’s own case for A.Y. 2007-08 and 2008-09 in & ITA no. 208/Del/2016 respectively, this Bench has disposed of the appeals and cross-objections by restoring the same to the file of learned AO to decide the issue as per the order of NCLT. It would be appropriate to reproduce the findings from order dated 20.09.2022 in para nos. 4 to 6:

“4. We have carefully perused the order of the NCLT [supra]. The relevant findings read as under:

"28. We hereby approve this Resolution Plan, as approved by the CoC, placed by the Applicant before this Adjudicating Authority. We, therefore, approve the Resolution Plan submitted by the Applicant along with the following directions in respect of the Corporate Debtor:

ITA 7861/Del/2018; ITA 4386/Del/2017 & CO no. 203/Del/2017 (i) The order of the moratorium passed by this Adjudicating Authority under Section 14 of the IBC,2016 shall cease to have effect from the date of passing of this Order.

(ii) The Resolution Professional shall forward all the records relating to the conduct of the CIRP and the Resolution Plan to the IBBI for its record and database.

(iii) The approved Resolution Plan shall become effective from the date of passing of this Order.

(iv) The Monitoring Committee, as provided in the Resolution Plan, shall be setup within 07 days of passing of this Order which shall take all necessary steps for implementation of the Resolution Plan. 29. The Resolution Professional shall forthwith send a copy of this Order to the CoC and the Successful Resolution Applicant. i. With the above, IA-3261 of 2021 stands allowed." 5. In light of the above, we restore the captioned appeals and cross objections to the file of the Assessing Officer. The Assessing Officer is directed to decide the issues as per the order of NCLT after affording reasonable and adequate opportunity of being heard to the assessee.

6.

In the result, all captioned appeals of the assessee and Revenue as well as the cross objections of the assessee are allowed for statistical purposes.”

4.

In regard to A.Y. 2009-10 also vide the assessee’s appeal has been disposed of by a coordinate Bench with following findings in para nos. 2 & 3:

“2. At the outset, it was brought to our notice that the order of NCLT dated 31.03.2022, the para no. 26 of the said order reads as under:

"26. The SRA has prayed for the reliefs and concessions as enumerated under the Resolution Plan approved by the CoC. From the plan approval date all inquiries, investigation and proceedings, whether civil or criminal,

ITA 7861/Del/2018; ITA 4386/Del/2017 & CO no. 203/Del/2017 suits, claims, disputes, interests and damages in connection with the Corporate Debtor or the affairs of the Corporate Debtor, pending or threatened, present or future in relation to any period prior to the plan approval date, or arising on account of implementation of this Resolution Plan, shall stand withdrawn, satisfied and discharged. From the date of approval of the 'Resolution Plan', the Resolution Applicant shall be legally authorized to seek appropriate orders from respective authorities / courts/tribunals for renewal of licenses/withdrawal/dismissal or abetment of the proceedings as the case may be."

3. Owing to this, the appeal of the assessee becomes infructuous.”

5.

Hon’ble Supreme Court in Ghanshyam Mishra & Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Limited (Civil Appeal no. 8129 of 2019) vide order dated 13.04.2021 has given following relevant conclusion in para no. 95 in regard to claim of Revenue where Resolution Plan is approved by NCLT:

“CONCLUSION 95. In the result, we answer the questions framed by us as under: (i) That once a resolution plan is duly approvedby the Adjudicating Authority under subsection (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 resolution plan; (ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect; (iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local

ITA 7861/Del/2018; ITA 4386/Del/2017 & CO no. 203/Del/2017 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.”

6. In the light of aforesaid , following earlier order dated 20.09.2022, the Bench is inclined to restore the issues to the file of learned AO to consider the issues in the light of aforesaid observations.

7.

Resultantly, the appeals and the cross-objection are allowed for statistical purposes.

Order pronounced in open court on 24/4/23.

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