Aban Offshore Limited Vs DCIT (ITAT Chennai)
The Income Tax Appellate Tribunal, Chennai, dealt with two appeals filed by the assessee-company against assessment orders passed under section 143(3) read with section 254 of the Income Tax Act, 1961 for the assessment years 2013–14 and 2017–18. As both appeals involved identical facts and common issues, the Tribunal disposed of them through a common order.
At the outset, the Tribunal noted that Corporate Insolvency Resolution Proceedings (CIRP) were pending against the assessee, and that the matter was seized by the National Company Law Appellate Tribunal. The Tribunal examined the issue in light of the Insolvency and Bankruptcy Code, 2016 (IBC), particularly sections 13 and 14, which mandate declaration of a moratorium upon admission of an insolvency application. Such moratorium prohibits the institution or continuation of suits or proceedings against the corporate debtor before any court or tribunal.
The Tribunal relied heavily on the judgment of the Hon’ble Supreme Court in Ghanashyam Mishra and Sons v. Edelweiss Asset Reconstruction, which clarified the legal consequences of approval of a resolution plan under section 31 of the IBC. The Supreme Court held that once a resolution plan is approved by the adjudicating authority, all claims provided for in the plan stand frozen and are binding on all stakeholders, including the Central Government, State Governments, and local authorities. Claims not forming part of the approved resolution plan stand extinguished, and no proceedings can be initiated or continued in respect of such claims. The Court further held that the 2019 amendment to section 31 of the IBC is clarificatory and retrospective in nature, and that statutory dues not included in the resolution plan cannot be pursued for periods prior to approval of the plan.
