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Judgment
ORDER
31.05.2022: Heard Learned Counsel for the Appellant and Resolution Professional.
This Appeal has been filed against the Order dated 25.11.2021 passed by the NCLT (National Company Law Tribunal, Kolkata Bench, Kolkata) in I.A (IB) No.- 352/KB/2021 in CP (IB) No. 174/KB/2018 limited to the extent, whereby, the order refuses the relief and concession as prayed for in Ref. of Clause 12.1.1 . Learned Counsel for the Appellant has referred in paragraph 31 at Serial No. 1, 2 & 3, which is to the following effect:-
| Sl. No. | Ref to Clause | Relief, concessions and approvals sought | Orders thereon |
|---|---|---|---|
| 1. | 12.1.1 | CBDT i. All income tax demands/ interest and penalty assessed/ to be assessed/claimed/ to be claimed against the corporate debtor for the FY/ period up to the effective date shall stand written off/ waived and extinguished on approval of Resolution Plan by the Hon’ble Adjudicating Authority. | This is for the relevant tax authorities to consider, and not in the nature of a waiver, concession or relief to be granted by this Adjudicating Authority. |
| 2. | ii. CD shall be exempted from the applicability of provisions of sections 41(1), Section 79 and Section 115 JB of the Income Tax Act, 1961 in respect of net credit balance pursuant to write off of assets (considered unrecoverable) of the CD and waivers/ extinguishments of the claims/ outstanding dues/ outstanding liabilities of the creditor of the CD, whether provided in the books of the CD or not, made pursuant to the approved Resolution Plan. All demands of whatever nature for the Financial years/ period up to the Effective Date; shall be deemed to have been waived/ written off/ extinguished and no amount shall be payable to the Income Tax Department by the Corporate Debtor. | This is for the relevant tax authorities to consider, and not in the nature of a waiver, concession or relief to be granted by this Adjudicating Authority | |
| 3. | III. The CD/RA shall be exempted from the applicability of section 56(2) (x) of the Income Tax Act, 1961 due to consideration offered to Creditor which might be different to the fair value of such assets. | This is for the relevant tax authorities to consider, and not in the nature of a waiver, concession or relief to be granted by this Adjudicating Authority. |
He submits that no claim was filed by the Income Tax Department in CIRP process, hence, all claim up to the date is stand extensive in view of the Judgement passed by Hon’ble Supreme Court of India in ‘Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Assets Reconstruction Company Ltd.’
Learned Counsel for the Appellant further submitted that with regard to any direct taxes in Serial No. 10 the Adjudicating Authority has record and relied on ‘Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Assets Reconstruction Company Ltd.’ and granted the relief and concession.
Learned Counsel for the Respondent No. 1 submitted that no claim was filed in Income Tax Department in the CIRP Process.
We have heard Learned Counsel for the Parties.
Reply filed by the Resolution Professional in Paragraph 11 the following has been stated:-
“11.The Applicant submits that in terms of the provisions of section 25(2)(h) of the Code read with regulation 36A(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, invitations in Form ‘G’ for Expressions of Interest (Eol) from potential resolution applicants were issued three times, details fo which are given below:-
i.On 28.12.2019 in Business Standard, (English) and Aajkal (Bengal) newspapers of Kolkata edition.
ii.On 31.01.2020 in Financial Express, (English) and Ekdin, Aajkal (Bengal) newspapers of Kokata edition.
iii.On 08.09.2020 in Business Standard, (English) and Ekdin, Aajkal (Bengal) newspapers of Kolkata edition.”
From the material on record, it does appear that no claim was filed by the Income Tax Department thus, all claims with regard to date of commencement of the CIRP Process was 15.10.2019 shall stand extinguish in view of the law laid down in Judgement passed by Hon’ble Supreme Court of India in ‘Ghanashyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Assets Reconstruction Company Ltd.
Adjudicating Authortiy had already referred in regard to indirect taxes the same order ought to have been passed with regard to Clause-1, in paragraph 31 at Serial No. 1, 2 & 3.
Learned Counsel for the Appellant submits that Adjudicating Authority ought to have held that claims of the Income Tax Department till date of extinguish in view of Judgement of Supreme Court of India which is mentioned herein above.
In paragraph 31 at Serial No. 1, 2 & 3 we see no necessity to pass any order. We just confine this appeal to at Serial No. 1 Clause 12.1.1 holding that all payments of Income Tax Department till the commencement of CIRP shall stand extinguish.
The appeal is allowed to the above extend.