Sare Gurugram Private Limited v. Income Tax Officer, Ward International Tax 3(1)(1), Delhi & Ors.

1. FACTS OF THE CASE

Sare Gurugram challenged section 201 proceedings for AYs 2014–15 and 2015–16 relating to a period before approval of its CIRP resolution plan on 24 April 2023. Its annexure recorded a Rs.5,64,51,068 demand for AY 2015–16 and pending appeal-effect action following a favourable CIT(A) order.

Source: PDF p. 1

2. DISCUSSION BY THE COURT

The taxpayer invoked the clean-slate principle for pre-approval liabilities not contemplated in the approved plan. The Court recorded that the controversy was undisputedly covered in its favour by Ghanashyam Mishra & Sons v. Edelweiss Asset Reconstruction, 2021 INSC 250.

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3. JUDICIAL DECISION

The petition was allowed and all section 201 proceedings for AYs 2014–15 and 2015–16 were set aside. The pending application was disposed of.

Source: PDF p. 2

4. OUTCOME

Assessee: the identified section 201 proceedings were set aside on the recorded resolution-plan basis.

Source: PDF p. 2

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

Check both timing and the approved plan

The reasoning concerns liabilities for the period before plan approval that are not contemplated in the plan. It should not be presented as extinguishing every tax liability merely because CIRP has occurred.

Source: PDF p. 2

Keep the operative scope precise

The relief identifies two assessment years and section 201. It does not decide unrelated tax periods, all statutory defaults or post-approval liabilities.

Source: PDF p. 2

The annexure is not proof of subsequent payment

The annexure records a demand and pending appeal-effect action. This judgment does not certify that a refund or implementation subsequently occurred.

Source: PDF p. 2