NSL Mining Resources India Pvt Ltd Vs Union of India (Telangana High Court)
The Telangana High Court, in the case of NSL Mining Resources India Pvt Ltd Vs. Union of India, directed the Income Tax Department to issue a fresh order concerning a tax demand of over ₹143 crore for the Assessment Year 2019-20. The petitioner, NSL Mining Resources, challenged the demand notice issued on March 20, 2025, arguing that the tax liability was extinguished following the approval of its Resolution Plan by the National Company Law Tribunal (NCLT), Hyderabad, on February 1, 2024. The petitioner contended that upon NCLT approval, all previous income tax dues, whether admitted or contingent, cease to exist from the effective date of the Resolution Plan.
During the High Court proceedings, the Income Tax Department’s Senior Standing Counsel acknowledged the NCLT-approved Resolution Plan. The Department submitted that the Assessing Officer (AO) was already in the process of issuing a fresh order under Section 156A of the Income Tax Act, 1961, to account for the NCLT plan. Section 156A specifically mandates the AO to modify any tax demand (tax, interest, penalty, etc.) where it has been reduced as a result of an order by the Adjudicating Authority (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC). This provision ensures that the tax demand conforms with the IBC’s resolution process.
