Liabilities payable to Central or State Govt in any period prior to Acquisition will be Written Off in full in terms of Resolution Plan as approved by NCLT: ITAT [Read Order]

Income Tax Appellate Tribunal (ITAT), New Delhi bench consisting of NK Billaiya, Accountant Member and Yogesh Kumar US, Judicial Member held that liabilities payable to Central or State Government in any period or prior to acquisition will be written off in full in terms of resolution plan as approved by National Company Law Tribunal (NCLT).

Monnet Ispat and Energy Ltd is the appellant in the present appeal.  Vivek Sharma, Counsel for the appellant, submitted that as per section 5 (21) of the IBC the dues to the Central Government also fall within the definition of operational debts and in terms of resolution plan as approved by the NCLT of the claims or demands or liabilities or obligations owned or payable to or assessed or assessable by the Central Government or State Government in relation to any period or prior to the acquisition will be written off in full and will be deemed to be permanently extinguished. The counsel stated that pursuant to the order of the NCLT this Tribunal in earlier assessment years have dismissed the appeal of the revenue.

V. K. Jain, the Counsel for the Revenue could not bring any distinguishing feature for the present appeal.

The Tribunal relied on the judgment in Ghanshyam Mishara and Sons v. Eddlewiess Assets Reconstruction Company, wherein it was held that “In terms of resolution plan approved by the NCLT, all claims, demands, liabilities or obligations owed or payable to or assessed by or assessable by the Central or State Government in relation to any period prior to acquisition will be deemed to written off in full and deemed to be permanently extinguished. 

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