Reopening Notice Issued to Petitioner for AY 2014-15 Quashed as IT Dept. Failed to Claim Escaped Income During CIRP | HC
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Case Details: Asian Colour Coated Ispat Ltd. v. Asstt. Commissioner of Income-tax. - [2024] 165 taxmann.com 641 (HC-Delhi)
Judiciary and Counsel Details
- Yashwant Varma & Ravinder Dudeja, JJ.
- Ms Kavita Jha & Himanshu Aggarwal, Advs. for the Petitioner.
- Abhishek Maratha, SSC, Parth Semiwal, Apoorv Agarwal, JSCs, Ms Nupur Sharma, Manav Goyal, Gaurav Singh, Ms Divya Verma & Bhanukaran Singh Jodha, Advs. for the Respondent.
Facts of the Case
In the instant case, the Petitioner Company, involved in steel manufacturing and trading, faced a financial creditor’s application under Section 7 of the IBC, leading to the appointment of an Interim Resolution Professional (IRP) and a moratorium.
Thereafter, the NCLT approved a Resolution Plan submitted by the SRA. Despite this approval, the petitioner received a notice under Section 148 of the Income Tax Act for the Assessment Year 2014-15.
The petitioner filed an instant writ petition challenging the notice issued by Respondent No.1, the Commissioner of Income Tax Department, under section 148 of the Income-tax Act, 1961 for the Assessment Year 2014-15.
It was noted that the respondents had not questioned the validity of the Resolution Plan at any stage. It was further noted that the resolution plan approved by the NCLT in respect of the petitioner company, Income Tax Deptt. was clearly constrained from submitting any claims during the Corporate Insolvency Resolution Process (CIRP) since, at that time, assessment proceedings were yet to be concluded, and reassessment proceedings in respect of escaped income couldn’t be initiated.
High Court Held
The High Court held that it was not the case of the respondent that the NCLT had been moved for purposes of recall of its order approving the Resolution Plan, and it was also not their case that the Resolution Plan, which effectively closes any claim or demand against the petitioner should be set aside. Therefore, the impugned notice issued under section 148 for the relevant assessment year was to be quashed and set aside.
List of Cases Reviewed
- Greater Noida Industrial Development Authority 2024 SCC OnLine SC 122 (para 19)
- State Tax Officer v. Rainbow Papers Ltd. (2023) 9 SCC 545 (para 21) distinguished
- M Tech Developers Pvt. Ltd. v. National Faceless Assessment Centre and Anr 2024 SCC OnLine Del 2276
- Sree Metaliks Limited v. Additional Director General and Ors. 2023 SSC OnLine Del 941
- Rishi Ganga Power Corporation Ltd. v. Assistant Commissioner of Income-tax 2023 SCC OnLine Del 6994 (para 22) followed
List of Cases Referred to
- M Tech Developers Pvt. Ltd. v. National Faceless Assessment Centre and Anr 2024 SCC OnLine Del 2276 (para 4)
- Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company (2021) 9 SCC 657 (para 5)
- Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta &Ors. (2020) 8 SCC 531 (para 5)
- Rishi Ganga Power Corporation Ltd. v. Assistant Commissioner of Income-tax 2023 SCC OnLine Del 6994 (para 5)
- Essar Steel India Limited v. Satish Kumar Gupta &Ors. (2020) 8 SCC 531 (para 5)
- State Tax Officer v. Rainbow Papers Ltd. (2023) 9 SCC 545 (para 18)
- Greater Noida Industrial Development Authority 2024 SCC OnLine SC 122.
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