Madras HC judgment clarifies an important distinction between pre-CIRP and during-CIRP tax liabilities in IBC-resolved companies.

[01/04, 17:30] sekarreporter1: [01/04, 17:24] sekarreporter1: http://youtube.com/post/Ugkxc0yT36dzwfYyA8yTtB-ulhIJz50V4bze?si=n-pZ5T8-AcRHo2-a
[01/04, 17:24] sekarreporter1: [01/04, 17:14] sekarreporter1: Madras HC judgment clarifies an important distinction between pre-CIRP and during-CIRP tax liabilities in IBC-resolved companies.
The High Court ruled that the Income Tax Department’s reassessment for AY 2018-19 is valid. The “Clean Slate” protection from IBC applies only to old (pre-CIRP) dues – not to tax filing obligations that arose after CIRP started. The company/Resolution Applicant had promised to file returns and seek relief but did not do so properly. Hence, the tax demand stands,
Court’s Key Analysis & Reasoning
1. Clean Slate Theory is Limited- The Supreme Court rulings (Essar Steel and Ghanashyam Mishra) apply only to pre-CIRP liabilities. They do not cover tax liabilities that arose during the CIRP period (e.g., filing obligations after 13.07.2018).
2. NCLT Order is Binding NCLT specifically recorded non-filing of returns and directed the Resolution Applicant to approach authorities for relief. The Plan itself required filing returns and seeking condonation of delay u/s 119(2)(b).
3. No Application for Relief Filed- The petitioner failed to approach the CBDT/Central Board of Direct Taxes for condonation of delay in filing the return for AY 2018-19.
4. Resolution Plan Does Not Help -The Plan provided only limited relief for disclosed statutory dues. It did not cover or extinguish the unfiled AY 2018-19 return liability. The petitioner cannot selectively claim benefits while ignoring its undertakings.
5. Reassessment Proceedings Valid -No violation of natural justice or procedural law. Tangible information existed for reopening. Possibly the first time in India to have a judgement of this nature
[01/04, 17:14] sekarreporter1: 👍👍
[01/04, 19:37] sekarreporter1: