NS Papers Limited And Another Vs Union of India Through Secretary And Others (Allahabad High Court)
Allahabad High Court held that the resolution applicant cannot be saddled with new claims once a resolution plan has been approved. Thus, impugned assessment order passed after approval of resolution plan are contrary to section 31 of the Insolvency and Bankruptcy Code, 2016 and hence liable to be set aside.
Facts- The petitioner no.1 was the erstwhile company that went through insolvency proceedings. The resolution plan was approved on February 24, 2021 wherein the Income Tax Department had also put forward its claim before the resolution professional. Subsequent to the resolution plan being approved, the assessment order has been passed for the particular assessment year. Thus, it is contended that the entire proceedings that has been initiated and the impugned order that has been passed are without any basis in law and are specifically contrary to Section 31 of the Insolvency and Bankruptcy Code, 2016.
Conclusion- Firstly, it is clear by the letter dated March 8, 2021 that the petitioner had informed the Income Tax Authorities with regard to approval of resolution plan. Secondly, the department itself had filed a claim before the Resolution Professional, and accordingly, the argument that the department was not aware of the IBC proceedings holds no water. Even assuming that the department was not informed about the proceedings, the law is very clear as expounded in the judgments cited above. The resolution applicant cannot be saddled with new claims once a resolution plan has been approved.
