The Bombay High Court has quashed fresh income tax reassessment proceedings holding that the department could not proceed against the company for a period preceding approval of its insolvency resolution plan, even on the basis of new information received from the Enforcement Directorate.
The Bench of Justice B. P. Colabawalla and Justice Farhan P. Dubash clarified, however, that the Income Tax Department remained free to take action against the company’s erstwhile management if permitted by law.
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The issue raised was whether fresh information alleging fraudulent transactions can justify reopening an assessment against a company after its resolution plan has been approved and past…