# In the matter of NS Papers Limited and Another vs. Union of India Through Secretary and Others

> HC judgment dated 2024-12-11. Citation: TCN-2024-HC-00007. The writ petition challenges an assessment order dated April 28, 2021, passed under Section 144…

- **Court:** HC
- **Order date:** 11 Dec 2024
- **Citation:** TCN-2024-HC-00007
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/ns-papers-limited-and-another-vs-union-of-india-through-secretary-and-others-47c5d859

## Summary

### Background

The writ petition challenges an assessment order dated April 28, 2021, passed under Section 144 read with Section 144B of the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner, M/S NS Papers Limited, underwent insolvency proceedings, and a resolution plan was approved on February 24, 2021. The Income Tax Department had also put forward its claim before the resolution professional. The petitioner argues that the assessment order, passed after the resolution plan's approval, burdens the resolution applicant with unforeseen liability, contrary to Section 31 of the Insolvency and Bankruptcy Code, 2016.

## Facts

M/S NS Papers Limited underwent insolvency proceedings. A resolution plan was approved on February 24, 2021. The Income Tax Department had put forward its claim before the resolution professional. Subsequent to the resolution plan being approved, an assessment order dated April 28, 2021, was passed under Section 144 read with Section 144B of the Income Tax Act, 1961, for the assessment year 2018-19. The petitioner informed the Income Tax Authorities about the approval of the resolution plan via a letter dated March 8, 2021. The department had also filed a claim before the Resolution Professional. The assessment order was related to a period prior to the approval of the resolution plan. The department argued that no proper information was given by the petitioner

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## Issues and analysis

### Issue 1: Whether an assessment order can be passed against a corporate debtor after the approval of a …

**Ratio:** Once a resolution plan is duly approved under Section 31(1) of the IBC, the claims as

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**Reasoning:** The court relied on the Supreme Court's judgments in Committee of Creditors of Essar vs.

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**Interpretation:** Section 31 of the IBC freezes claims upon approval of the resolution plan,

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**Application:** The assessment order, passed after the resolution plan's approval, was deemed

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## Parties

- **Judges:** Shekhar B.…; Vipin Chandra…
- **Respondents:** M/S NS PAPERS…; UNION OF INDIA…
- **Other parties:** Kohi…

## Timeline

- **2018-19-01 — Assessmen…**: The assessment year in…
- **2021-02-24 — Resolution Plan…**: The resolution plan for M/S NS…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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