SARE GURUGRAM PRIVATE LIMITED V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 19 & ANR.

W.P.(C)/10778/2024

AI Insights

The case involves SARE Gurugram Private Limited, the petitioner, who challenged the proceedings initiated by the Deputy Commissioner of Income Tax Central Circle 19 and another respondent, post the approval of a resolution plan under the Corporate Insolvency Resolution Process (CIRP). The proceedings were related to various assessment years from 2014-15 to 2021-22 and included demands and notices under different sections of the Income Tax Act, 1961. The core legal issue was whether the tax demands and proceedings initiated post-moratorium and resolution plan approval could stand, given the 'clean slate theory' which suggests that all pre-existing liabilities are wiped clean unless explicitly included in the resolution plan.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 746656 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 30-04-2025
• Assessment Year: misc
• Other Referred Cases: Ghanashyam Mishra & Sons Private Limited through the Authorized Signatory v. Edelweiss Asset Reconstruction Company Limited through the Director & Others: Neutral Citation: 2021 INSC 250
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DEBESH PANDA; ZEHRA KHAN; VIKRAMADITYA SINGH; ANAUNTTA SHANKAR; RAVICHA SHARMA; PIYUSH BERIWAL; KAUTILYA BIRAT; NIKHIL CHAUBEY; JYOTSNA VYAS
• Assessee Lawyers: ASHISH MEHTA; AANCHAL JAIN; BHARAT JAIN
• Keywords: Clean Slate Theory; Corporate Insolvency Resolution Process; Income Tax; Resolution plan
• Section: 148; 143(3); 142(1); 271(1)(c); 153C; 143(1)(a); 270A

Judgement Text

"$~119 * IN THEHIGHCOURTOF DELHIATNEW DELHI + W.P.(C) 10778/2024 CM APPL. 44362/2024 SARE GURUGRAM PRIVATE LIMITED .....Petitioner Through: Mr Ashish Mehta, Ms Aanchal Jain and Mr Bharat Jain, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 19 & ANR. .....Respondents Through: Mr. Debesh Panda, SSC Ms. Zehra Khan, Mr. Vikramaditya Singh, JSCs Ms Anauntta Shankar and Ms Ravicha Sharma, Advocates for the Revenue. Mr Piyush Beriwal, Mr Kautilya Birat, Mr Nikhil Kumar Chaubey and Ms Jyotsna Vyas, Advocates for UOI. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 30.04.2025 1. The petitioner has filed the present petition, inter alia, impugning the proceedings, as referred in Annexure P1 to the present petition. The said Annexure is set out below: - “Impugned Proceedings carried out by Respondent(s) against the Petitioner The following proceedings by Respondent 1 were initiated / continued post Moratorium Date (ie 09 March 2021) and concluded before or after the approval of the Resolution Plan (ie 24 April 2023). AY Section & Initiation Date Demand (in INR/-) Authority before which the proceedings are pending Last notice date Response Date 2014-15 153C; 10.03.2022 13,92,75,990 First Appellate Authority [CIT(A)] 24.03.2023 21.04.2023 271(1) (c); 24.03.2023 - Respondent 1 29.03.2023 06.04.2023 (by RP) 2015-16 153C; 10.03.2022 8,74,18,190 CIT(A) 24.03.2023 21.04.2023 271(1) (c); 29.03.2023 - Respondent 1 29.03.2023 06.04.2023 (by RP) 2016-17 153C; 10.03.2022 12,41,18,570 CIT(A) 24.03.2023 21.04.2023 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/05/2025 at 15:25:48 271(1) (c); 24.03.2023 - Respondent 1 24.03.2023 04.04.2023 148; 17.02.2021 - Respondent 1 17.02.2021 (u/s 148) ITR filed on 20.12.2021 2017-18 153C; 10.03.2022 16,72,46,080 CIT(A) 24.03.2023 21.04.2023 143(3); 20.08.2018 - Respondent 1 to give appeal effect pursuant to favourable CIT(A) order dated 31.01.2024 29.12.2019 Multiple appeal effect applications filed; no order passed till date. 270A; [post 143(3)]; 29.12.2019 65,97,620 Respondent 1 to give appeal effect pursuant to favourable CIT(A) order dated 31.01.2024 30.06.2021 Multiple appeal effect applications filed; no order passed till date. 270A; [post 153C]; 24.03.2023 - Respondent 1 24.03.2023 04.04.2023 (by RP) 2018-19 153C; 10.03.2022 19,32,90,640 CIT(A) 24.03.2023 21.04.2023 143(3); 23.09.2019 - Respondent 1 to give appeal effect pursuant to favourable CIT(A) order dated 29.01.2024 16.04.2021 Multiple appeal effect applications filed; no order passed till date. 270A; [post 143(3)]; 16.04.2021 - Respondent 1 02.06.2021 19.07.2021 (by RP) 2019-20 153C; 10.03.2022 53,45,760 CIT(A) 24.03.2023 21.04.2023 270A; 24.03.2023 - Respondent 1 24.03.2023 06.04.2023 (by RP) 2020-21 153C; 10.03.2022 96,65,743 CIT(A) 24.03.2023 21.04.2023 270A 24.03.2023 - Respondent 1 24.03.2023 06.04.2023 (by RP) 142(1); 03.02.2022 - Respondent 1 (time barred) 03.02.2022 2021-22 143(1) (a) - Concluded 12.04.2022 22.04.2022 2. The petitioner is essentially assailing the initiation of the proceedings This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/05/2025 at 15:25:48 under Sections 142(1),143(1)(a), 143(3), 148 153C, 270A, and 271(1)(c) of the Income Tax Act, 1961 [the Act] in respect of the Assessment Years [AYs] 2014-15 to 2021-22. 3. Concededly, the aforesaid proceedings relate to a period prior to 24.04.2023 being the date of the approval order in respect of a resolution plan prepared under the Corporate Insolvency Resolution Process [CIRP]. It is the petitioner’s case that in view of the clean slate theory, the petitioner cannot be vexed by any proceedings or demand, which relates to the period prior to the order approving the resolution plan, if the said dues or liabilities are not contemplated under the said plan. 4. Undisputedly, the controversy involved in the present case is covered in favour of the Assessee by the decision of the Supreme Court in Ghanashyam Mishra & Sons Private Limited through the Authorized Signatory v. Edelweiss Asset Reconstruction Company Limited through the Director & Others: Neutral Citation: 2021 INSC 250. 5. In view of the above, the present petition is allowed and all proceedings initiated in respect of AYs 2014-15 to 2021-22 under Sections 142(1),143(1)(a), 143(3), 148 153C, 270A, and 271(1)(c) of the Act are set aside. 6. The petition is disposed of in the abovesaid terms. The pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J APRIL 30, 2025 M Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/05/2025 at 15:25:48 "