Srei Equipment Finance Limited Vs Assessment Unit/Verification Unit/ Technical Unit/Income Tax Department & Ors. (Calcutta High Court)
The Calcutta High Court has set aside an interim order by a Single Bench and quashed reassessment proceedings initiated by the Income Tax Department against Srei Equipment Finance Limited for assessment years 2016-17 and 2019-20. The High Court ruled that provisions of the Insolvency and Bankruptcy Code (IBC), 2016, override those of the Income Tax Act, 1961, especially once a resolution plan has been approved by the National Company Law Tribunal (NCLT).
Srei Equipment Finance Limited, the corporate debtor, had challenged notices issued under Section 148A(b) of the Income Tax Act and a subsequent order under Section 148A(d), as well as a consequential notice under Section 142(1). The Income Tax Department initially questioned the locus standi of the corporate debtor to file the writ petition, arguing that a resolution plan had already been approved by the NCLT on August 11, 2023.
The High Court dismissed the locus standi objection, relying on the Supreme Court’s decision in Ghanashyam Mishra & Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited, (2021) 9 SC 657. In this case, the Supreme Court clarified that a corporate debtor retains locus standi to file a writ petition even after a resolution plan is approved and management is taken over by a resolution applicant, as the plan pertains to the corporate debtor itself. The resolution applicant merely steps into the corporate debtor’s shoes.
