No Fresh Income Tax Claims or Reassessment Permissible Post Approval of Resolution Plan: Supreme Court CJ Bench refuses to Interfere with Gujarat HC Order [Read Judgement]
The Gujarat High Court, depending on the Supreme Court’s held that once a resolution plan is approved by the NCLT, all prior claims, including statutory dues of government authorities stand extinguished.
![No Fresh Income Tax Claims or Reassessment Permissible Post Approval of Resolution Plan: Supreme Court CJ Bench refuses to Interfere with Gujarat HC Order [Read Judgement]](https://images.taxscan.in/h-upload/2025/09/25/2091001-supreme-court-income-tax-reassessment-taxcsan.webp "No Fresh Income Tax Claims or Reassessment Permissible Post Approval of Resolution Plan: Supreme Court CJ Bench refuses to Interfere with Gujarat HC Order [Read Judgement]")
In a recent ruling, the Supreme Court has refused to interfere with the Gujarat HighCourt’s decision confirming the decision that no fresh income tax claims or reassessment proceedings can be initiated once a resolution plan under the Insolvency and Bankruptcy Code (IBC), 2016 is approved.
The respondent in the SLP, Ausil Corporation, was issued with reassessment notices issued under Sections 148 and 148A(d) of the Income Tax Act, 1961 for Assessment Year 2015-16.
The company, however, which had gone through the Corporate Insolvency Resolution Process (CIRP), argued that such notices were untenable as the Income Tax Department had already filed its claim of ₹1.26 crore during CIRP, which was duly verified and admitted.
Following approval of the resolution plan on 14.10.2021, the Department was classified as an operational creditor and received only ₹21,332 on a pro-rata basis, in line with the plan provisions.
The Gujarat High Court, depending on the Supreme Court’s earlier judgment in Ghanashyam Mishra & Sons v. Edelweiss ARC (2021), held that once a resolution plan is approved by the NCLT, all prior claims, including statutory dues of government authorities stand extinguished.
Consequently, fresh reassessment proceedings or recovery attempts in respect of periods prior to the resolution approval are impermissible. The Gujarat Court quashed the reassessment notices and observed that no stakeholder, including tax authorities, can bypass the IBC framework to revive extinguished claims.
The Income Tax Department challenged this decision before the Supreme Court. However, the Chief Justice Justice K. Vinod Charndran and Justice Atul S. Chandurkar while condoning delay, declined to interfere with the High Court’s order, dismissing the Special Leave Petition.
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