# In the matter of Uttam Value Steels Ltd. & Ors. vs.  Assistant Commissioner of Income Tax & Ors.

> HC judgment dated 2024-08-28. Citation: TCN-2024-HC-00040. The Writ Petition challenges notices issued under the Income-tax Act, 1961 by the Revenue to Uttam…

- **Court:** HC
- **Order date:** 28 Aug 2024
- **Citation:** TCN-2024-HC-00040
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/uttam-value-steels-ltd-ors-vs-assistant-commissioner-of-income-tax-ors-b6ce65c3

## Summary

### Background

The Writ Petition challenges notices issued under the Income-tax Act, 1961 by the Revenue to Uttam Value Steels Ltd. after the company's successful resolution under the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The notices pertain to assessment years 2013-14 to 2019-20. The Petitioner-Assessee argues that the resolution plan, approved by the NCLT on May 6, 2020, extinguished all past claims, including those raised by the Revenue, and that the Revenue cannot initiate fresh proceedings for past claims pertaining to the period prior to the initiation of CIRP. The Revenue contends that the proceedings relate to liabilities emerging after the CIRP and are therefore legitimate.

## Facts

Uttam Value Steels Ltd. underwent Corporate Insolvency Resolution Process (CIRP) and was successfully resolved. The resolution plan was approved by the NCLT on May 6, 2020, entailing a full waiver of all tax and tax-related interest dues pertaining to the period prior to commencement of the CIRP. Prior to the CIRP, on April 17, 2018, the Revenue conducted a search and seizure action against the Vinod Jatia group, alleging bogus transactions and entries. On March 15, 2021, after the resolution plan's approval, the Revenue initiated proceedings under Section 153C of the Income-tax Act against Uttam Value Steels for assessment years 2013-14 to 2018-19 and issued notices under Sections 143(2) and 142(1) for assessment year 2019-20. Uttam Value Steels objected, arguing that

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## Issues and analysis

### Issue 1: Whether the proceedings initiated by the Revenue under the Income-tax Act, 1961 against the …

**Ratio:** Section 31(1) of the IBC states that a resolution plan approved by the Adjudicating

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**Reasoning:** The court relies on the Supreme Court's judgment in Ghanshyam Mishra, which held that the

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**Interpretation:** Section 31 of the IBC is interpreted to mean that once a resolution plan is

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**Application:** In this case, the court applies the ratio and reasoning to the facts, finding

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## Parties

- **Judges:** G. S. KUL…; SOMASEKHAR…
- **Respondents:** Uttam Value…; Assistant…

## Timeline

- **2018-04-17 — Search and Seizure…**: The Revenue carried out search and seizure action under Section 132 of the Act against…
- **2018-06-26 — Admission in…**: The Petitioner-Assessee was admitted into a CIRP by an order passed by the National…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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