ACIT Vs Indo Enviro Integrated Solutions Private Limited (ITAT Delhi)
Summary: The Delhi ITAT considered the Revenue’s appeal in ITA No.9121/Del/2025 and the assessee’s cross-objection in CO 60/Del/2026 for AY 2017-18, arising from the order dated 14.10.2025 of the ld. Jt. Commissioner of Income Tax (Appeals)-10, Mumbai, concerning the assessment order passed under Section 154 of the Income-tax Act, 1961 dated 14.03.2024. The assessee had originally been incorporated as IL&FS Waste Management and Urban Services Limited and subsequently underwent changes in name and ownership following the NCLT resolution process, ultimately becoming Indo Enviro Integrated Solutions Private Limited. The Tribunal noted the NCLT order dated 02.02.2021, under which 15.10.2018 was fixed as the cut-off date and claims of creditors including Central Government, State Government, statutory, local, tax and regulatory authorities pertaining to periods prior to that date, including actual or contingent liabilities, were directed to stand unconditionally and fully extinguished. Although the assessment order under Section 143(3) was passed on 30.09.2021 and the rectification order under Section 154 was passed on 14.03.2024, the Tribunal treated the liability as relating to AY 2017-18 and therefore to a period preceding the stipulated cut-off date. Relying on the Supreme Court’s decision in Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., the Tribunal concluded that the demands raised pursuant to the assessment and rectification orders became irrecoverable. The Revenue’s appeal and the assessee’s cross-objection were accordingly dismissed.
SEO Title: Delhi ITAT Dismisses Revenue Appeal, Holds AY 2017-18 Tax Demands Irrecoverable
SEO Description: Delhi ITAT dismissed Revenue’s appeal and held AY 2017-18 tax demands irrecoverable under the binding NCLT resolution order and Supreme Court precedent.
Delhi ITAT: Tax Demands Relating to Pre-NCLT Cut-off Period Stand Fully Extinguished and Are Irrecoverable
The Delhi ITAT held that the tax demands arising from the assessment order under Section 143(3) and the subsequent rectification order under Section 154 for AY 2017-18 were irrecoverable in view of the binding NCLT resolution order.
The NCLT had fixed 15 October 2018 as the cut-off date and directed that all claims of the Central Government, State Government, statutory and tax authorities, relating to any period before that date, whether actual or contingent, would stand unconditionally and fully extinguished. Although the assessment and rectification orders were passed on 30 September 2021 and 14 March 2024, respectively, the underlying tax liability related to AY 2017-18, which fell before the stipulated cut-off date.
Relying on the Supreme Court’s decision in Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., the Tribunal concluded that the demands raised pursuant to these orders could no longer be recovered. Accordingly, the Revenue’s appeal was dismissed. The assessee’s cross-objection was also dismissed.
List of Cases Discussed / Relied Upon
- Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd.,(2021) 126 taxmann.com 132 (SC) — relied upon for the conclusion that claims not forming part of an approved resolution plan, including statutory dues, stand extinguished and cannot be recovered.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The appeal in ITA No.9121/Del/2025 filed by the revenue and CO 60/Del/2026 filed by the assessee for AY 2017-18, arises out of the order of the ld. Jt. Commissioner of Income Tax (Appeals)-10, Mumbai [hereinafter referred to as ‘ld. JCIT(A)’, in short] dated 14.10.2025 against the order of assessment passed u/s 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 14.03.2024 by the Assessing Officer, ACIT, Circle-10(1), Delhi (hereinafter referred to as ‘ld. AO’).
2. The revenue has raised the following grounds of appeal:
1) Without prejudice, on the facts and in the circumstances of the case and in law, the Ld. Addl/JCIT(A) erred in quashing the rectification order dated 14.03.2024 passed under section 154 as void ab initio, without appreciating that the rectification was made to correct a mistake apparent from record, namely that the assessme nt order had denied TDS credit of Rs. 88,18,594/- whereas the computation sheet had inadvertently allowed the same.
2) Without prejudice, on the facts and in the circumstances of the case and in law, the Ld. Addl/JCIT(A) erred in holding that the rectification order under section 154 is in contravention of the NCLT order dated 02.02.2021 and therefore does not survive, without appreciating that the rectification order only aligned the computation with the express finding in the assessment order and did not CRAETE any new liability OR raise any demand.
3) Without prejudice, on the facts and in the circumstances of the case and in law, the Ld. Addl/JCIT(A) erred in not appreciating that the assessment order had clearly held that the assessee was not entitled to TDS credit of Rs. 88,18,598/- for A.Y. 2017-18 due to non- offering of corresponding income in this year and non- compliance to opportunities, and therefore the rectification merely gave effect to what was already concluded in assessment.
4) The Ld. CIT(A) has erred in law and on facts in holding that the order passed u/s 154 dated 14.03.2024 is ab initio void merely on the ground appreciating the factual position that the assessee company was active and existing as per the MCA portal on the date of passing of the rectification order. 5) The appellant craves leave to add, alter, amend OR withdraw any ground of appeal at any time before OR during the hearing of the appeal.
3. We have heard the rival submissions and perused the material available on record. The Assessee was incorporated on 02 August 2007 in the name of IL&FS Waste Management and Urban Services Limited. The name of the Company was changed to IL&FS Environmental Infrastructure and Services Limited on 13 December 2010 and was a part of IL&FS group. Post National Company Law Tribunal (“NCLT”) resolution, Ever Enviro Resource Management Private Limited (“ERMPL”) acquired the entire shareholding of the Assessee and became the ultimate Holding Company with effect from 06 April 2021, and consequent changes of name, the Assessee herein is now known as Indo Enviro Integrated Solutions Private Limited with effect from 12 October 2022.
4. The ld AR placed on record the copy of the order of the National Company Law Tribunal (NCLT) dated 02.02.2021, wherein, the cut off date was fixed as 15.10.2018 meaning thereby all claims of all the creditors including the Central Govt, any State Govt., statutory, local, tax or regulatory authority to whom such claim is owed under any law which pertain to a period prior to 15.10.2018 and all liability, whether actual or contingent, whether existing at or relating to a period prior to 15.10.2018 in respect of IL & FS Environment and Infrastructure, Dakshin Dilli Swachh Initiative Ltd; Swayam Swachatta Initiative Ltd, shall stand unconditionally and fully extinguished. In the instant case, the assessment order for AY 2017- 18 was passed u/s 143(3) on 30.09.2021 and rectification order u/s 154 of the Act was passed on 14.03.2024. It could be seen that both the assessment order as well as the rectification order are in relation to the period post date i.e. 15.10.2018. Hence, as per the decision of the Hon’ble Supreme Court in the case of Ghanashyam Mishra & Sons (P) Ltd Vs. Edelweiss Asset Reconstruction Co. Ltd (2021) 126 taxmann.com 132 (SC), the demands raised pursuant to the aforesaid assessment order and rectification order becomes irrecoverable.
5. In view of the above, the appeal of the revenue is dismissed and cross objection of the assessee is dismissed. 5th Order pronounced in the open court on 2 -August-2026.
