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Judgment
(Hybrid Mode)
Heard Ld. Counsel for Appellant, Ld. Counsel for the Resolu-tion Professional and Shri. Anurag Ojha, Sr. Standing Counsel for the Income Tax Department.
This Appeal has been filed by the Appellant, the successful Resolution Applicant of the Corporate Debtor, Himalayan Mineral Waters Pvt. Ltd, chal-lenging the order passed by Adjudicating Authority on 12/08/2025, in so far as Paragraphs 46, 47 and 53, it has not granted the prayers made by the Ap-pellant. By the impugned order, the Adjudicating Authority has approved the Resolution Plan and while approving the Resolution Plan, with respect to the reliefs, concessions and waivers prayed by the Appellant with regard to Income Tax Department dues and other authority, following was observed in Para-graphs 46, 47 and 53.
“46.The reliefs, concessions and waivers sought by the Successful Resolution Applicant will be dealt with strictly in accordance with the ap-plicable laws by the concerned authorities acting under different Acts and Statutes.
47.As regards to matter pertaining to Income Tax Act, 1961 for which the Income Tax Department has been made Respondent in this application, a notice was issued to the Income Tax Department through the Principal Chief Commissioner of Income Tax, Lucknow. However, no reply has bene received from the Income Tax Department. In absence of any response from the Income Tax Department, any concession relief or waivers under the In-come Tax Act, 1961 as sought by the SRA shall be subject to prior approval of the Competent Authority under the Income Tax Act, 1961.
53.The reliefs, concessions and waivers sought/prayed by the Suc-cessful Resolution Applicant will be dealt with strictly in accordance with the applicable laws including Companies Act, 2013 and Income Tax Act, 1961, etc. as discussed in para 46 & 47 of this order.”
Ld. Counsel for Appellant confined her submission only to the extent of dues of the Income Tax Department, which were existing at the time of the Ap-proval of the Resolution Plan for which no claim has been filed by the Income Tax Department in the Corporate Insolvency Resolution Process of the Corpo-rate Debtor.
It is submitted that, in view of the judgement of Hon’ble Supreme Court in Ghanshyam Mishra & sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Limited (2021) 9 SCC 657, any claim which ought to have been raised in the CIRP and not raised, shall stand extinguished.
It is submitted that the Income Tax Department has not filed any claim in the CIRP and the said claim need to be extinguished by virtue of Approval of the Resolution Plan.
Submission of the Counsel for Successful Resolution Applicant is that the extinguishment of the claim, which was existing, cannot be saddled on the successful Resolution Applicant.
Ld. Counsel for the Income Tax Department, refuting the submission, submitted that Adjudicating Authority has rightly granted reliefs and conces-sions in Paragraph 47 observing that any concessions, reliefs or waivers, as sought by the SRA, shall be subject to prior approval of the competent authori-ty under the Income Tax Act, 1961. Ld. Counsel further relying on Section 179 of the Income Tax Act 1961, submitted that with respect to the Private Compa-ny, Income Tax Authority has power to proceed against the Directors, in event the amount is not been able to be recovered from the Company. He submitted that the Appellant has to approach the Income Tax Department for claiming any relief, waivers or concessions.
Shri Abhijeet Sinha, Ld. Counsel for the Resolution Professional has also placed reliance on the judgement of Hon’ble Supreme Court in Ghanshyam Mishra & sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Limited in Para 93, it is submitted that, it is admitted case that no claim was filed by In-come Tax Department before the Resolution Professional.
We have considered submissions of the Parties and perused the Record. The Law, with respect to extinguishment of claims, which are not part of the Resolution Plan had been laid down by three judge bench of the Supreme Court in Ghanshyam Mishra & sons Pvt. Ltd. vs Edelweiss Asset Reconstruc-tion Company Limited, wherein Paragraph 93 & 102.3 of the judgement, follow-ing was held :
“93.As discussed hereinabove, one of the principal objects of the I&B Code is providing for revival of the corporate debtor and to make it a going concern. The I&B Code is a complete Code in itself. Upon admis-sion of petition under Section 7 there are various important duties and functions entrusted to RP and CoC. RP is required to issue a publication inviting claims from all the stakeholders. He is required to collate the said information and submit necessary details in the information memorandum. The resolution applicants submit their plans on the basis of the details pro-vided in the information memorandum. The resolution plans undergo deep scrutiny by RP as well as CoC. In the negotiations that may be held be-tween CoC and the resolution applicant, various modifications may be made so as to ensure that while paying part of the dues of financial credi-tors as well as operational creditors and other stakeholders, the corporate debtor is revived and is made an on-going concern. After CoC approves the plan, the adjudicating authority is required to arrive at a subjective satisfac-tion that the plan conforms to the requirements as are provided in sub-section (2) of Section 30 of the I&B Code. Only thereafter, the adjudicating authority can grant its approval to the plan. It is at this stage that the plan becomes binding on the corporate debtor, its employees, members, credi-tors, guarantors and other stakeholders involved in the resolution plan. The legislative intent behind this is to freeze all the claims so that the resolution applicant starts on a clean slate and is not flung with any surprise claims. If that is permitted, the very calculations on the basis of which the resolution applicant submits its plans would go haywire and the plan would be un-workable.
102.3.Consequently, all the dues including the statutory dues owed to the Central Government, any State Government or any local 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.”
Conclusion recorded by Supreme Court in Paragraph 102.3 clearly holds that all dues including the Statutory dues owe to the Central Government, any State Government or any Local Authority, if not part of the Plan, shall stand extinguished and no proceeding, in respect of such dues for the period prior to date on which Adjudicating Authority grant its Approval, could be continued.
The above judgement clearly supports the submission of the Appellant. In so far as extinguishment of dues are concerned, we however, hassen to add that as far as concessions, reliefs or waivers, Adjudicating Authority has rightly observed that successful Resolution Applicant has to approach the Competent Authority under the Income Tax Act, 1961.
We thus, do not filed any error in the said observation in Paragraph 47.
Now coming to the submission of Mr. Ojha, relying on Section 179 of In-come Tax Act, 1961, we are of the view that in this Appeal, we need not answer the said question that does not arise in the facts of the present case.
It shall be always open for the Parties to take such measures as available in law and in accordance with law.
In view of the above, we dispose of the Appeal, holding that dues of the Income Tax Department or other Statutory Authorities which were existing on the date of Approval of Resolution Plan and has not been filed, shall stand ex-tinguished by virtue of judgement of Hon’ble Supreme Court in Ghanshyam Mishra & sons Pvt. Ltd. vs Edelweiss Asset Reconstruction Company Limited.
Rest of the orders of the Adjudicating Authority are to be followed.
Appeal disposed.