“Section 178(6)”
The decision most relied on for Section 178(6) is Ghanashyam Mishra And Sons. v. Edelweiss Asset Reconstruction (126 Taxmann.com 132), cited in 192 judgments on BharatTax.
Leading authorities on Section 178(6)
Once a resolution plan is approved under Section 31(1) of the IBC, claims not included in the plan are extinguished and cannot be pursued. This applies to statutory dues owed to the government and other authorities.
All claims, including statutory dues, that predate the approval of a resolution plan under the IBC stand extinguished by operation of law. No proceedings can be initiated or continued for such claims if they are not part of the approved plan.
The Insolvency and Bankruptcy Code (IBC) overrides other laws, including the Income Tax Act, due to its non-obstante clause in Section 238. Proceedings initiated against a corporate debtor undergoing insolvency are prohibited under Section 14 of the IBC.
Interest under sections 234B and 234C is not attracted in cases where income is assessed under Minimum Alternate Tax (MAT) provisions under section 115JB.
The moratorium period under the Insolvency and Bankruptcy Code, 2016, will be excluded when calculating the limitation period for proceedings involving a corporate debtor. The Assessing Officer can seek re-institution of an appeal if the resolution process concludes.
Reopening assessment proceedings under Section 147 is permissible within four years, even if full and true particulars were provided during the original assessment, provided the Assessing Officer forms a prima facie opinion of underassessment or escapement of income.
Interest under sections 234B and 234C is not leviable on tax determined under the Minimum Alternate Tax (MAT) provisions, especially when prevailing judicial pronouncements supported this view at the relevant time. However, subsequent Supreme Court decisions have clarified that interest is leviable even under MAT provisions.
Appeals filed by a corporate debtor before the Tribunal are dismissed as infructuous when proceedings cannot continue against the corporate debtor after an NCLT order, due to the moratorium period under the IBC Code.
