ACIT (OSD) Vs GAIL Mangalore Petrochemicals Ltd. (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi dismissed an appeal by the Income Tax Department against GAIL Mangalore Petrochemicals Ltd. (formerly JBF Petrochemicals Limited). The case arose after the company underwent Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. The National Company Law Tribunal (NCLT) had approved GAIL’s resolution plan, but the Income Tax Department attempted to raise claims after the plan’s approval. The ITAT upheld that no fresh claims could be considered post-approval, reinforcing the binding nature of the resolution plan on all stakeholders, including statutory authorities.
The resolution process began when IDBI Bank initiated insolvency proceedings against the company in 2022 due to loan defaults. During the CIRP, the Resolution Professional (RP) invited claims from all creditors, including government entities, with a deadline set for submission. The Income Tax Department failed to submit its claims within the stipulated timeframe. After extensive evaluation, the Committee of Creditors (CoC) approved GAIL’s resolution plan with a 100% voting share, which was subsequently ratified by the NCLT in March 2023. Despite being notified and given the opportunity to object, the Tax Department did not raise any claims during the process.
