ACIT Vs AMW Auto Component Limited (Supreme Court of India)
The case concerns a challenge to a notice issued under Section 148 of the Income Tax Act seeking to reopen assessment proceedings. The petitioner, a company engaged in manufacturing components for engineering and automotive industries, had filed its return of income for the Assessment Year 2021–22. Subsequently, a notice dated 31.03.2025 was issued for reopening the assessment.
Read HC Judgment in this case: Reassessment Notice Quashed Due to Extinguishment of Tax Liabilities Under Approved Resolution Plan
The petitioner had earlier undergone Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The process was initiated by a financial creditor and admitted by the adjudicating authority on 01.09.2020. An Interim Resolution Professional was appointed, who invited claims from creditors in accordance with the applicable provisions. A Resolution Plan for revival of the petitioner was approved by the National Company Law Tribunal (NCLT) on 12.10.2023.
The approved Resolution Plan contained explicit provisions stating that all tax liabilities, whether assessed or unassessed, relating to the period prior to the NCLT approval date, including penalties, interest, and any proceedings, would stand waived and extinguished. It further clarified that such liabilities, even if determined in the future, would be deemed extinguished. The Plan also provided for waiver of TDS liabilities, penalties, prosecution risks, and other tax-related obligations for prior periods.
