LexVAIBHAV GOEL & ANR. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR.
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[2025] 3 S.C.R. 841 : 2025 INSC 375 Vaibhav Goel & Anr. v. Deputy Commissioner of Income Tax & Anr. (Civil Appeal No. 49 of 2022) 20 March 2025 [Abhay S. Oka* and Ujjal Bhuyan, JJ.] Issue for Consideration Matter pertains to the validity of the income tax dues of the corporate debtor owed to the Central Government, when not a part of the approved Resolution Plan. Headnotes† Insolvency and Bankruptcy Code, 2016 – s.31(1) – Legal effect of approval of a Resolution Plan – After approval of resolution plan, issuance of demand notices by the Income Tax Department for assessment years 2012-13 and 2013-14 in respect of the Corporate Debtor-CD, however no claim about the demands submitted before the Resolution Professional – Application by the second respondent-Monitoring Professional challenging the demands – NCLT dismissed the application without assigning reasons and imposed costs – Said order upheld by the NCLAT – Correctness: Held: All the dues including the statutory dues owed to the Central Government, if not a part of the Resolution Plan, shall stand extinguished and no proceedings could be continued in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval u/s.31 – On facts, the income tax dues of the CD for the assessment years 2012-13 and 2013-14 not part of the approved Resolution Plan – Thus, in view of sub-section (1) of s.31, the dues of the Income Tax Department- first respondent owed by the CD for the said assessment years stands extinguished – Resolution plan approved, binding on the IT Department – Thus, subsequent demands raised by Income Tax Department for assessment years 2012-13 and 2013-14 invalid * Author 842 [2025] 3 S.C.R. Supreme Court Reports and cannot be enforced – Approach of NCLT in dismissing the application without reasons and imposing costs unwarranted – Additional demands made by the IT Department in respect of the assessment years 2012-13 and 2013-14 will operate as roadblocks in implementing the approved Resolution Plan, and appellants will not be able to restart the operations of the CD on a clean slate – Impugned orders of NCLT and NCLAT set aside. [Paras 8, 10, 11, 13, 14] Case Law Cited Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta & Ors. [2019] 16 SCR 275 : (2020) 8 SCC 531; Ghanashyam Mishra and Sons Pvt. Ltd. through the Authorised Signatory v. Edelweiss Asset Reconstruction Company Ltd. through the Directors & Ors. [2021] 13 SCR 737 : (2021) 9 SCC 657 – referred to. List of Acts Insolvency and Bankruptcy Code, 2016; Income Tax Act, 1961. List of Keywords Resolution Plan; Corporate Insolvency Resolution Process; Statutory dues; Contingent liabilities; Clean slate principle; Additional demands; Income tax dues; Corpoate Debtor; Approval of Resolution Plan. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 49 of 2022 From the Judgment and Order dated 25.11.2021 of the National Company Law Appellate Tribunal in CAAT (I) No. 956 of 2020 Appearances for Parties Advs. for the Appellants: Nikhil Nayyar, Sr. Adv., Ms. Charchika Yadav, Devashish Chauhan, Ms. Charu Ambwani. Advs. for the Respondents: N Venkatraman, A.S.G., Raj Bahadur Yadav, Rajat Nair, H R Rao, Ishaan Sharma, Sachin Sharma, Sarthak Karol. [2025] 3 S.C.R. 843 Vaibhav Goel & Anr. v. Deputy Commissioner of Income Tax & Anr. Judgment / Order of the Supreme Court Judgment Abhay S. Oka, J. FACTUAL DETAILS 1. This appeal under Section 62 of Insolvency and Bankruptcy Code, 2016 (for short, ‘the IB Code’) takes an exception to the judgment and order dated 25th November 2021 passed by the National Company Law Appellate Tribunal (‘the NCLAT’). The Corporate Insolvency Resolution Process (CIRP) was initiated concerning the corporate debtor M/s. Tehri Iron and Steel Casting Ltd. (‘the CD’). The appellants are the Joint Resolution Applicants. They submitted a Resolution Plan dated 21st January 2019. The National Company Law Tribunal (‘the NCLT’), vide its order dated 21st May 2019, approved the Resolution Plan submitted by the appellants. 2. The Resolution Plan had referred to the liability of Rs.16,85,79,469/- (Rupees Sixteen-crores, eighty-five lakhs, seventy-nine thousand, four-hundred and sixty-nine only) of the first respondent (Income Tax Department) for the assessment year 2014-15 based on the demand dated 18th December 2017 which was rectified under section 154 of the Income
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