Income Tax claims not included in approved Resolution Plan of IBC are recoverable: ITAT [Read Order]

The Income Tax Appellate Tribunal, Ahmedabad bench held that income tax claim not included in approved resolution plan of IBC is recoverable.

The assessee engaged in the business of manufacturing and trading in MS ingots and alloy steel ingots for which filed a return of income declaring a loss of (-) Rs.1,76,02,459/-.  The AO disallowed a sum of Rs.7,547/- towards ROC expenses considering them to be capital expenditure, disallowance of additional depreciation claim on DG set of Rs.99,473/-, the addition of Rs.6,73,600/- under section 56(2)(viib) r.w.r. 11U/UA being the difference in share valuation, and disallowance of interest-free loans and advances under section 36(1(iii) of Rs.2,50,000/- and determined a loss of Rs.1,65,781,839/-.  The AO also determined book profit under section 115JB of the Act at Rs.27,31,249/-.   The CIT(A) partly allowed the appeal.

 The assessee contended that as per the order passed by the National Company Law Tribunal (NCLT) and Resolution Plan proposed under the Insolvency and Bankruptcy Code, 2016, they have amalgamated with M/s.Agarwal Mittal Concast Private Limited.  Further contended that the demand had arisen prior to the order of the NCLT dated 13.12.2021, and argued that the IBC proceedings are overriding and demand to the tax shall stand extinguished. 

It was observed that the proceeding under provisions of the Insolvency and Bankruptcy Code, 2016 overrides the proceedings under the Income Tax Act, 1961. Further viewed that as per the Resolution Plan, no claim was made by the Income Tax Department before the Insolvency Professional and in the Resolution Plan approved by the NLCLT, an exgratia amount of Rs.10 lakhs only approved to the operational creditors being statutory creditors such as CGST Department and Asstt.Comm. of Sales Tax.

The Tribunal comprising Smt Annapurna Gupta, AM and T R Senthil Kumar, JM dismissed the appeal as being not maintainable. 

To Read the full text of the Order CLICK HERE

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