In the case of Deccan Chronicle Holdings Limited, the Hyderabad bench of the Income Tax Appellate Tribunal(ITAT) has held that statutory dues and claims stand frozen after approval of the resolution plan by Insolvency and Bankruptcy Code (IBC), 2016.
Shri S.Rama Rao appeared for the assessee and Shri Y.V.S.T. Sai appeared for the revenue.
Both the assessee and revenue challenged the orders passed by the Commissioner of Income Tax (Appeals)-4, Hyderabad for the assessment years 2010-11, 2011-12, 2012-13 & 2013-14.
The Corporate Insolvency Resolution Proceedings (CIRP) were pending against the assessee. The Tribunal analysed the provisions under sections 13 and 14 of the Insolvency and Bankruptcy Code (IBC), 2016 along with the decision in Ghanashyam Mishra and Sons (supra).
It was evident that once the proceedings have commenced by the institution of an application under section 7 or 9 or 10 of the Code, the continuance of the pending proceedings was prohibited and when once they reach the logical conclusion with due approval of the resolution plan by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen.
Section 31(1) of the IBC states that if a resolution plan was approved by Section 30 and the Adjudicating Authority was satisfied, then the plan shall be binding upon employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.
Shri Rama Kanta panda, AM & Shri K Narasimha Chary, JMobserved that the appeals cannot be proceeded with during the continuance of the proceedings under the Insolvency and Bankruptcy Code. The Tribunal granted leave to seek the restoration of the appeals if necessitated by the orders in the Corporate Insolvency Resolution Proceedings and the appeals of the assessee and the revenue got dismissed.
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