Gujarat High Court

Ausil Corporation Private Limited vs Assistant/Deputy Commissioner Of ... on 1 October, 2024

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

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                           C/SCA/2171/2023                                      JUDGMENT DATED: 01/10/2024

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                                   IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 2171 of 2023


                      FOR APPROVAL AND SIGNATURE:

                      HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                      and
                      HONOURABLE MRS. JUSTICE MAUNA M. BHATT
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                      1     Whether Reporters of Local Papers may be allowed                          No
                            to see the judgment ?

                      2     To be referred to the Reporter or not ?                                   No

                      3     Whether their Lordships wish to see the fair copy                         No
                            of the judgment ?

                      4     Whether this case involves a substantial question                         No
                            of law as to the interpretation of the Constitution
                            of India or any order made thereunder ?

                      ================================================================
                                     AUSIL CORPORATION PRIVATE LIMITED
                                                   Versus
                          ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1),
                                               RAJKOT & ANR.
                      ===============================================================
                      Appearance:
                      MR B S SOPARKAR(6851) for the Petitioner(s) No. 1
                      KARAN G SANGHANI(7945) for the Respondent(s) No. 1
                      NOTICE UNSERVED for the Respondent(s) No. 2
                      ===============================================================
                          CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                                and
                                HONOURABLE MRS. JUSTICE MAUNA M. BHATT

                                                Date : 01/10/2024
                                               ORAL JUDGMENT

(PER : HONOURABLE MRS. JUSTICE MAUNA M. BHATT)

1. Heard learned advocate Mr.B.S.Soparkar for

the petitioner and learned Senior Standing

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Counsel Mr.Karan G. Sanghani for the

respondent No.1

2. Rule, returnable forthwith. Learned Senior

Standing Counsel Mr.Karan Sanghani waives

service of notice of rule for and on behalf of

the respondent No.1.

3. This petition under Article 226 of the

Constitution of India is filed challenging the

notices dated 05.04.2021 and 29.07.2022 issued

under Section 148 of the Income Tax Act, 1961

(for short 'the Act') and order dated

29.07.2022 passed under Section 148A(d) of the

Act for Assessment Year 2015-16.

4. The brief facts are as under :

4.1. The petitioner is a company

incorporated under the Companies Act, 1956 and

filed its original return of income for

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Assessment Year 2015-16 on 31.10.2015

declaring total loss of Rs.52,76,30,767/-. The

case of the petitioner was processed and

scrutiny was undertaken. Thereafter,

Assessment Order under Section 143(3) of the

Income Tax Act, 1961 (for short 'the Act') was

passed on 30.12.2017 assessing the loss at

Rs.45,27,61,805/- for Assessment Year 2015-16.

4.2. It is the case of the petitioner that

the petitioner was subjected to insolvency

proceedings under the Insolvency and

Bankruptcy Code, 2016 (for short 'the Code')

wherein a Corporate Insolvency Resolution

Process (for short 'the CIRP') was initiated

vide order dated 05.02.2020 pursuant to an

application made by Bank of India before the

Hon'ble National Company Law Tribunal,

Ahmedabad Bench (for short 'the NCLT').

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4.3. The Tribunal appointed an Interim

Resolution Professional who made a public

announcement in accordance with Sections 13,

Section 15 and other relevant provisions of

the Code read with Regulation 6 of the

Insolvency Regulations, 2016 thereby inviting

claims from various creditors of the

petitioner and in response thereto, among

other claims, the Interim Resolution

Professional received a claim of

Rs.1,26,80,855/- from the Deputy Commissioner

of Income Tax, Rajkot which was verified and

admitted in its entirety. The Deputy

Commissioner of Income Tax, Rajkot was thus

classified as an Operational Creditor in

accordance with provisions of the Code and

this was the only claim received from the

Income Tax Department pursuant to the public

announcement.

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4.4. It is the case of the petitioner that

under the CIRP, the Resolution Plan of one

M/s. Zaveri & Co. Private Limited for the

revival of the Petitioner was approved by the

Hon'ble Tribunal on 14.10.2021 under Section

30(6) of the Code. The said Resolution Plan

provided for payment of total amount of

Rs.10,00,000/- to the Operational Creditors on

a pro-rata basis against their admitted claims

of Rs.59,44,51,751/-. The Deputy Commissioner

of Income Tax has thus been paid Rs.21,332/-

on pro-rata basis in accordance with the

Resolution Plan.

4.5. The Petitioner has been issued the

impugned notice under section 148 of the Act

dated 05.04.2021 in the name of Jyoti Power

Corporation Private Limited asking the

Petitioner to file a return of income of AY

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2015-16. The Petitioner had challenged the

jurisdiction to issue the notice as well as

validity of the same before this Court vide

Special Civil Application No. 6170 of 2022

which was eventually disposed of vide order

dated 05.05.2022 in view of the judgement of

the Hon'ble Supreme Court in the case of Union

of India and Others vs. Ashish Agarwal.

4.6. Thereafter, on 26.05.2022, the

petitioner has received a notice in

consequence to the judgement of the Hon'ble

Supreme Court in the case of Union of India

and Others vs. Ashish Agarwal along with

reasons recorded for re-opening of assessment.

4.7. The Petitioner filed the primary

objection vide letter dated 10.06.2022 in line

with the direction of the Hon'ble Supreme

Court and to drop the proceedings.

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4.8. Thereafter on 29.07.2022, the

respondent No.1 has passed the order under

Section 148A(d) of the Act rejecting

objections of the petitioner.

4.9. Being aggrieved and dis-satisfied with

the notices dated 05.04.2021 and 29.07.2022

issued under Section 148 of the Act as well as

the order passed under Section 148A(d) of the

Act dated 29.07.2022 the petitioner has filed

this petition before this Court.

5.1. Learned advocate Mr.B.S.Soparkar for

the petitioner submitted that in view of the

settled legal position and in view of

resolution plan being approved by order dated

14.10.2021, all past dues of the Income Tax

Department got extinguished and therefore, the

notice notices dated 05.04.2021 and 29.07.2022

issued under Section 148 of the Act as well as

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the impugned order passed under Section

148A(d) of the Act dated 29.07.2022 for

Assessment Year 2015-16 deserves to be quashed

and set aside.

5.2. In support of his submissions, he

relied upon decision of Hon'ble Supreme Court

in the case of Ghanashyam Mishra & Sons

Private Limited versus Edelweiss Asset

Reconstruction Company Limited & Ors reported

in (2021) 9 SCC 657.

6. On the other hand, opposing the petition,

learned Senior Standing counsel Mr.Karan

Sanghani submitted that the notices notices

dated 05.04.2021 and 29.07.2022 issued under

Section 148 of the Act were issued by the

respondent to reassess the income for

Assessement Year 2015-16. It was submitted

that in view of clear statutory provision, the

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powers of the respondent cannot be curtailed

when procedure in accordance with law has been

followed. He further submitted that the

decision relied upon by the petitioner in case

of Ghanashyam Mishra (Supra) is with regard to

extinguish of the claim after approval of

resolution plan by NCLT and this being not the

recovery proceedings, the decision would not

be applicable.

7. Considering the submissions made on behalf

of both the sides and upon perusal of the

record, it is noticed that pursuant to

insolvency proceedings initiated under the

Code, a resolution plan dated 14.10.2021 was

approved by the Tribunal under Section 30(6)

of the Code. It is also on record that the

claim which was lodged by the Deputy

Commissioner of Income Tax, Rajkot was

verified and admitted in the proceedings

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before NCLT after consideration of the claim

filed by the Additional Commissioner of Income

Tax, Rajkot. In the decision of Hon'ble

Supreme Court in case of Ghanashyam Mishra

(Supra) it is held as under :

"102. NCLT found, that by email dated 6.1.2018, EARC had submitted its claim in Form 'C' for an amount of Rs.648,89,62,395/-. In response to the said email, RP sought a clarification, as to whether the corporate guarantee had been invoked by the applicant. RP had not received any response till 21.2.2018 from EARC. Despite repeated requests made by RP, EARC did not respond to the query made by RP. From the record placed before NCLT, it was clear, that EARC had not invoked the corporate guarantee. NCLT therefore posed a question to itself, as to whether an uninvoked corporate guarantee could be considered as matured

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claim of the applicant. NCLT found, that once the moratorium was applied under Section 14 of I&B Code, EARC was prevented from invoking the corporate guarantee. NCLT further found, that the OMML's guarantee had not been invoked by EARC till the date of completion of CIRP process and once the moratorium was imposed, it could not invoke the corporate guarantee. NCLT therefore found, that there is no illegality or irregularity in not admitting the claim of EARC."

8. Thus, in view of above clear provisions of

law no person would be entitle to initiate or

continue any proceedings in respect of any

claim for any dues relating to the period

prior to approval of resolution plan. In view

of approval of resolution plan, all

liabilities of all stakeholders including that

of Government/ Statutory Authority shall stand

extinguished after approval of the resolution

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