Empee Distilleries Limited Vs ACIT (Madras High Court)
The Madras High Court heard appeals concerning substantial questions of law related to Empee Distilleries Limited and the applicability of a Resolution Plan approved under the Insolvency and Bankruptcy Code (IBC). The appeals questioned whether the Income Tax Appellate Tribunal (ITAT) had jurisdiction to decide an appeal filed by the erstwhile management before the Corporate Insolvency Resolution Process (CIRP), whether assessment orders and CIT(A) orders would survive following the approval of the Resolution Plan by the National Company Law Tribunal (NCLT), and whether pending proceedings or demands not included in the Resolution Plan would continue or be extinguished. The court also considered whether the ITAT was justified in declining to exercise its jurisdiction under Section 254(2) of the Income Tax Act despite being informed of the ongoing resolution process.
The High Court referred to the Supreme Court’s decision in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. (2021) 9 SCC 657, which held that upon approval of a Resolution Plan under Section 31 of the IBC, all claims not included in the plan—including statutory dues owed to the Central or State Governments—stand extinguished and cannot be pursued. The court noted that the Revenue had submitted a claim in the NCLT proceedings, but it was neither accepted nor rejected, and no appeal was filed against the NCLT’s approval before the National Company Law Appellate Tribunal (NCLAT).
