Ornate Spaces Private Limited Vs DCIT (Bombay High Court)
The Bombay High Court heard a writ petition challenging notices issued under Sections 148 and 142(1) of the Income Tax Act, 1961 for Assessment Year 2021-22. The petitioner argued that the notices were issued after a revised Resolution Plan had been approved on 6 October 2023. Paragraph 8.27 of the Resolution Plan explicitly stated that all tax liabilities, claims, and demands—whether direct or indirect, known or unknown, admitted or disputed—relating to any period prior to the NCLT approval date were permanently extinguished. The petitioner contended that once the Resolution Plan was approved, no tax notice could be issued for any period before the approval date, making the proceedings academic.
The Court observed that this issue was no longer res integra and relied on earlier Bombay High Court decisions, including Alok Industries Ltd., and the Supreme Court’s recent ruling in Vaibhav Goel & Anr., which held that no belated claims can be included after approval of a resolution plan. The Court also referenced Ghanshyam Mishra & Sons Pvt. Ltd., emphasizing that allowing belated claims would prevent the resolution applicants from restarting the corporate debtor’s business on a clean slate.
Accordingly, the Court allowed the writ petition, quashing the impugned notices dated 28 March 2025 and 2 June 2025. The petition was disposed of with no order as to costs, and the order was directed to be acted upon via digitally signed copies.
