Reassessment Action
Delhi HC junks income tax department's reassessment notice to Asian Colour
This story was originally published at 13:44 IST on 8 August 2024
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NEW DELHI – The Delhi High Court has rejected the Income Tax department's notice for reassessing debt-ridden Asian Colour Coated Ispat Ltd's income for assessment year 2014-15. The tax department had said that it received credible information to indicate that an income of Asian Colour amounting to 51.24 bln rupees appeared to have escaped assessment.
The court said that the tax department's reassessment action would not sustain against Asian Colour in view of its earlier verdicts on the issue. "We, accordingly, allow the instant writ petition and quash the impugned notice under Section 148 for A.Y. 2014-15 dated Mar 31, 2021," said the high court.
In 2018, the national company law tribunal had admitted a petition by the State Bank of India to start insolvency proceedings against Asian Colour. Thereafter, the tribunal approved JSW Steel Coated Products Ltd’s resolution plan for the debt-ridden company in 2020. JSW Steel Coated Products is the wholly owned subsidiary of JSW Steel Ltd. However, the tax department issued a notice to Asian Colour for reassessment of its income for the assessment year 2014-15.
Challenging the tax department's notice, Asian Colour moved the high court. The petitioner said the tax department stood denuded of jurisdiction or authority to commence any action for reassessment pertaining to a period prior to the approval of the resolution Plan by virtue of Section 31 of the Insolvency and Bankruptcy Code, 2016. The tax department said that its claims cannot be brushed aside or ignored merely because a resolution plan has come to be approved under the insolvency law. End
Reported by Surya Tripathi
Edited by Deepshikha Bhardwaj
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