Post-Resolution Demand
SC says can't include belated claims after approval of IBC resolution plan
This story was originally published at 21:05 IST on 20 March 2025
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NEW DELHI – The Supreme Court on Thursday held no belated claim can be included after a bankruptcy resolution plan is approved by the National Company Law Tribunal. The top court said the demands raised by the Income Tax Department against Tehri Iron and Steel Casting Ltd. for assessment years 2012-13 and 2013-14, were invalid and cannot be enforced.
The National Company Law Tribunal had approved the joint resolution plan of Vaibhav Goel and Madhu Goel for Tehri Iron and Steel Casting in 2019. The resolution plan had taken into account a tax demand for INR 168.58 million for the assessment year 2014-15 as a contingent liability.
After the approval of the resolution plan, the Income Tax Department issued demand notices for assessment years 2012-13 and 2013-14. The monitoring professional of Tehri Iron told the Income Tax Department that the demands for the two assessment years were unsustainable in law. The monitoring committee and the resolution applicants also applied to the tribunal to declare the tax demands invalid. However, the tribunal dismissed the applications and imposed a cost of INR 100,000 rupees on them. After the National Company Law Appellate Tribunal upheld the tribunal's order, the resolution applicants moved the apex court.
"We cannot approve NCLT's approach of not considering the application on merits and dismissing the same without recording any reasons and also by imposing costs," the top court said. The order of payment of costs was unwarranted, the court said. If such demands are taken into consideration, the appellants will not be in a position to recommence the business of the corporate debtor on a clean slate, the court added. End
Reported by Surya Tripathi
Edited by Saji George Titus
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