Assessee-corporate debtor underwent insolvency resolution and a revised Resolution Plan was approved by NCLT on 6-10-2023. As per the plan, all tax liabilities, claims or demands made by the Income Tax Department in relation to any period before the NCLT approval date were deemed to be permanently extinguished. For the relevant assessment year, the Assessing Officer issued a notice under section 148 dated 28-3-2025, and a consequential notice under section 142 dated 2-6-2025. On writ, the Court held that once a resolution plan was approved by the Adjudicating Authority, no belated claim could be included therein. Accordingly, the notices were quashed and set aside. (AY. 2021-22)
Ornate Spaces (P.) Ltd v. Dy.CIT (2026) 185 taxmann.com 422 (Bom) HC) Editorial : SLP of revenue dismissed, Dy. CIT v. Ornate Spaces (P.) Ltd. (2026) 310 Taxman 405 (SC)
S. 148 : Reassessment-Notice-Merger-Waiver of tax liability-Assessment year 2021-22-Assessee-corporate debtor underwent insolvency resolution and a revised assessee underwent insolvency, and a resolution plan approved by NCLT extinguished all prior tax liabilities-Assessing Officer issued notices under sections 148 and 142 for a period prior to approval-No belated claims could be raised after approval of resolution plan-High Court quashed the notice and consequential orders. [S. 147, the Insolvency and Bankruptcy Code, 2016, S. 31, Art.226]
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