IN THE NATIONAL COMPANY LAW TRIBUNAL

AHMEDABAD
DIVISION BENCH
COURT - I
ITEM No.301
IA/1243(AHM)2023 in CP(IB) 487 of 2018
Proceedings under Section 60(5) IBC r.w Reg. 32A & Reg.33(2)(c) of IBBI Reg.

IN THE MATTER OF:

Jindal Power Limited ........Applicant
V/s
Dushyant C. Dave Liquidator of Shirpur Power Pvt Ltd & Anr ........Respondent

Order delivered on 16/02/2024

Coram:
Mr. Shammi Khan, Hon’ble Member(J)
Mr. Sameer Kakar, Hon,ble Member(T)

PRESENT:
For the Applicant :
For the Respondent :

ORDER
The case is fixed for pronouncement of the order. The order is pronounced in the
open court, vide separate sheet.

-Sd- -Sd-
SAMEER KAKAR SHAMMI KHAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
 IN THE NATIONAL COMPANY LAW TRIBUNAL,
DIVISION BENCH - I, AHMEDABAD

IA/1243(AHM)2023 in
CP(IB)/487(AHM)2018

[An application under Section 60(5) of Insolvency and

Bankruptcy Code, 2016 read with Regulation 32A and
Regulation 33(2)(C) of the IBBI (Liquidation Process)
Regulations, 2016 Rule 11 of NCLT Rules, 2016.]

In the matter of Shirpur Power Private Limited

JINDAL POWER LIMITED

Having address at:
Plot No.2, Sector 32,
Gurgaon -122001 (Haryana) …Applicant

Vs.

1. DUSHYANT C. DAVE
Liquidator of Shirpur Power Private Limited,
1101 Dalamal Towers, Nariman Point,
Mumbai-400021

2. THE PRINCIPAL COMMISSIONER OF INCOME TAX-III

C-wing, 4th Floor, Pratyakshar Bhawa,
B/h, Kamdhanu Complex,
Near Excise Office,
Panjarapole, Ambawadi,
Ahmedabad-380014 ….Respondents

Order Pronounced on 16.02.2024

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 CORAM:
SHAMMI KHAN, MEMBER (JUDICIAL)
SAMEER KAKAR, MEMBER (TECHNICAL)

APPEARANCE:
For the Applicant : Mr. Rashesh Sanjanwala, Sr. Adv.
a/w. Mr. Parth Shah, Adv.
For the Income Tax
Department : Ms. Bhumi Gandhi, Adv. for Ms.
Maithili Mehta, Adv.

ORDER

1. The present application is filed on 23.10.2023 under

section 60(5) of Insolvency and Bankruptcy Code, 2016

read with regulation 32A and regulation 33(2)(C) of the

IBBI (Liquidation Process) Regulations, 2016 and Rule 11

of the National Company Law Tribunal Rules, 2016,

seeking reliefs and concessions which are as follows:

a) Direct that on and from the Acquisition Date, all the

assets specified in the Process Memorandum and the

Balance Sheet shall continue to be the assets of the

Corporate Debtor/Successful Bidder. Each asset

(including its properties, whether freehold, leasehold or

license basis) of the Corporate Debtor shall be vested

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 with the Successful Bidder free and clear of all

encumbrances; and/or

b) Direct the Liquidator to provide audited financial

statements till the Financial Year 2022-23 and as on the

Acquisition Date within 60 days of issuance of the Sale

Certificate; and/or

c) i)Direct that the Corporate Debtor can opt for the new

tax regime under Section 115BAA of the Income Tax Act,

1961 in its income tax return and necessary filings for the

previous year 2021-22, if it so desires; and/or

ii) Direct that any exemption available to a Resolution

Applicant in the case of implementation of a Resolution

Plan under Section 79 of the Income Tax Act be extended

to the Successful Bidder and the Corporate Debtor.

Change in shareholding shall not:

a) result in lapse of any carry forward accumulated Tax

losses of the Corporate Debtor; and

b) be considered as void under Section 81 of the Central

Goods and Service Tax Act, 2017 and concerned

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 authority shall not impose any liability on the Successful

Bidder and the Corporate Debtor.

iii) Direct that the brought forward tax losses of the

Corporate Debtor be permitted to be carried forward and

set-off against future income as per section 79(2)(c) and

section 72 respectively of the Income Tax Act, 1961 and

to exempt any tax liability arising under Section 115JB of

the Income Tax Act, 1961 and allowing setting off of

losses and unabsorbed depreciation for the purpose of

computation of book profit as permitted under section

115JB of Income Tax Act, 1961; and/or

(iv) Direct that no adjustments to be made against the

losses which would have any impact of reducing losses or

unabsorbed depreciation under Income Tax Act, 1961;

and/or

(v) Direct that the Corporate Debtor to be exempted from

the application of the various fair valuation/deeming

provisions of the IT Act (including but not limited to

Sections 43CA, 45, 50C, 50CA, and 56); and/or

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 (vi) Direct that any procedural or other regulatory non-

compliance by the Corporate Debtor, including but not

limited to belated filing of any return under the IT Act,

shall not in any manner affect its entitlement to claim TAR

carry forward of losses and unabsorbed depreciation;

and/or

(vii) Direct that if no response is received regarding the

relief claimed by the Successful Bidder under Section

79(2) of Income Tax Act from the Principal Commissioner

or Commissioner of Income Tax in terms of the order

dated 11.07.2023 passed by this Hon'ble Tribunal on the

date of first hearing of the present application, it shall be

deemed that the Principal Commissioner of Income Tax

or Commissioner of Income Tax has no objections to the

Corporate Debtor carrying forward its Tax losses and

claims under Section 79(2) shall be deemed to have been

allowed; and/or

d) Direct that all the assessments, proceedings, demand

notices, penalty proceedings, show-cause notice and

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 appeals, whether adjudicated or pending, initiated or not

initiated with respect to Income Tax, Central Sales Tax,

GST, VAT, CENVAT, MODVAT, Customs or any other

applicable Taxes under any applicable law shall be

deemed to have been completed and complied and the

Successful Bidder and/or the Corporate Debtor shall not

be liable to pay any taxes or interest or penalty or any

prosecution arising out of such assessments pertaining

to any period prior to the Acquisition Date including but

not limited to claim arising out of:

(i) Any non-compliance in relation to filing of Income-tax

Return under Section 139 of Income Tax Act, 1961/ or

any consequential revision or any other forms as required

to be filed by Corporate Debtor under provisions of

Income Tax Act, 1961

(ii)Non-deduction of TDS under provisions of Income Tax

Act, 1961.

(iii) Any transaction entered by Corporate Debtor having

an impact on taxable income, brought forward losses

and/or Tax payable/ Tax refund of such entity for any

period prior to Acquisition Date and any underreporting or

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 misreporting in relation to the same. Any non-

recording/reporting of income by Corporate Debtor in its

books of account.

(iv) Any Tax payable on the transaction of corporate

guarantee provided by the Corporate Debtor for loans /

facilities availed by its related parties or personal

guarantee provided by the directors of the Corporate

Debtor to the Banks / Non-Financial Banking Company or

any other financial institutions for loans / facilities availed

by the Corporate Debtor.

e) Direct that the Successful Bidder and/or the Corporate

Debtor, as the case may be, shall be entitled to all the

assets including all benefits with respect to tax losses,

CENVAT, MODVAT, input tax credit of various taxes

including but not limited to central excise duty, service

tax, sales tax, goods and service tax or cess by whatever

name known which pertains to the transactions of the

Corporate Debtor whether recorded or not due to tax

returns not filed by the Corporate Debtor or in case of

erroneous filing for which the statutory due date for

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 rectification has lapsed as per the applicable laws for the

period prior to the Acquisition Date; and/or

f) Direct that all the pending refunds / deposits should be

forthwith released along with applicable interest without

any set off or adjustment against any Tax demands along

with the consequential relief. All the refunds which have

already been adjusted by the Tax authorities against Tax

demands relating to the period prior to the Acquisition

Date should be forthwith released along with applicable

interest; and/or

g) Direct that waiver of any Tax (including withholding tax,

Income Tax, Minimum Alternate Tax and Goods &

Service Tax) or consequences (including interest, fine,

penalty, etc.) on Corporate Debtor, Successful Bidder

and its shareholders, including but not limited to liabilities

if any under Section 28, Section 41, Section 56((read

with rule 11U and 11UA of the Income Tax Rules 1962),

Section 43, Section 43B, Section 79, Section 45, Section

115JB, Section 269SS, Section 269T, Section 271D,

Section 271DA and Section 271E of the Income-tax Act,

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 1961, including, without limitation waiver of income tax

implication arising due to any write back/write off of

liabilities in the books of accounts of Corporate Debtor

shall not have any impact on and shall not be adjusted

towards brought forward tax and book loss / depreciation

and input tax credit; and/or

h) Direct that the requirement and applicability of certificate

under section 281 of the Income-tax Act, 1961 and

provisions of taking over its predecessor's tax liability

under section 170 of the Income Tax Act, 1961 DTA mat,

be deemed to be complied with on the Acquisition Date.

Further, the transaction shall not be treated as void under

section 281 of the Income UIST NO.5585 OF INDA Act,

1961 for any claims in respect of Tax or any other sum

payable by the Corporate Debtor or any shareholder of

the Corporate Debtor; and/or

i) Allow filing return of income and/or revised return of

income, for the Assessment Years prior to the Acquisition

Date without any penalty or costs; and/or

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 j) Direct that all actual and potential dues and liabilities

under the provisions of the Income Tax Act, 1961,

including taxes, duties, penalties, interest, Vines, cesses,

charges, unpaid tax deducted at source or tax collected

at source (Including, without limitation, tax liabilities set

out in the List of Claims, whether admitted or not, due or

contingent, asserted or unasserted, crystallised or

uncrystallised, known or unknown, disputed or

undisputed, present or future, in relation to any period

prior to the Acquisition Date or arising on account of

acquisition by the Successful Bidder of the Corporate

Debtor, shall be deemed to be permanently extinguished

by virtue of the order of the NCLT approving this sale as

a going concern and the Corporate Debtor or the

Successful Bidder shall at no point of time, directly or

indirectly, have any obligation, liability or duty in relation

thereto; and/or

k) Direct that the Successful Bidder shall enter in its books

of accounts to give G BAROT effect to transaction

entered into and executed for the purpose of sale of the

Corporate as a going concern; and/or

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 l) Direct the Liquidator to make the necessary accounting

entries in consultation with the Successful Bidder for the

smooth transmission and clearing the balance sheets of

the Corporate Debtor and for filing return of income

and/or revised return of income, for the Assessment

Years prior to the Acquisition Date, such return shall be

deemed to have been filed in time as per the section 139

of the Income Tax Act, 1961; and/or

m) Direct the Liquidator that all the compliances for the

period up to the Acquisition Date including filing of

necessary documents and returns with the Registrar of

Companies, Income Tax Authorities, Provident Fund

Authorities any other Government Authorities should be

completed in consultation with the Successful Bidder and

necessary entries be made in this regard in the statutory

records; and/or

n) Grant liberty to the Successful Bidder to approach this

Hon'ble Tribunal in order to address any difficulties faced

by it with respect to the implementation of activities of the

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 Successful Bidder with respect to the corporate debtor;

and/or

o) Direct and grant liberty to the Successful Bidder to

amend, alter, modify, delete, rescind, and/or substitute

any prayer(s) made hereinabove and pass any further

order(s) and/or direction(s) as this Hon'ble Tribunal may

deem fit and proper in the interest of justice.

2. An affidavit in support of the application is sworn by Mr.

Chandravir Singh on behalf of Jindal Power Limited.

3. The Corporate Debtor was admitted into Corporate

Insolvency Resolution Process vide order dated

04.03.2020 and subsequently, the liquidation order was

passed by this Tribunal on 10.03.2021.

4. It is stated that the liquidator had filed an application

bearing IA No. 523 of 2023 seeking sale of Corporate

Debtor on a going concern basis as a private sale to the

Applicant herein at a price higher than the reserve price

of the last failed e-auction (4th e-auction). The said

application was allowed vide order dated 19.07.2023 and

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 the Corporate Debtor was sold on the basis of the going

concern at the value of Rs.433,16,59,509/- which was

considered by Stakeholders Consultation Committee

(‘SCC’).

5. It is further stated that the Applicant herein had filed an

interlocutory application bearing I.A. No. 709 of 2023

before this Tribunal on 04.07.2023 seeking reliefs,

concessions and permissions necessary for successful

revival of the Corporate Debtor as a going concern. The

said application was listed for hearing on 11.07.2023 and

notice was issued upon Department of Income Tax

directing them to file their say in the matter.

6. This Tribunal vide its order dated 24.07.2023 in I.A. No.

709 of 2023 directed the Applicant to file a tabular

written submission categorizing the reliefs and

concessions into different categories. The reliefs and

concessions were broadly categorized into following

groups:

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 a) Group I: Going Concern Sale, Acquisition steps and

shareholding patter, appointment of directors,

Companies Act, MCA and ROC related aspects for

smooth functioning of Corporate Debtor.

b) Group II: Compounding, Condoning of non-

compliances, liabilities, legal proceedings, pending

inquires, investigations, waiver and immunities.

c) Group III: Contracts, license, permits and

approvals.

d) Group IV: Tax and Corporate Debtors books of

accounts, assets.

7. It is stated that the Principal Commissioner of Income

Tax Department, Ahmedabad vide its letter dated

27.07.2023 sought certain information regarding the

shareholding pattern and details of carried forward losses

of the Applicant which were provided by the Applicant by

letter dated 29.07.2023.

8. It is further stated that the Liquidator and Applicant have

entered into a private sale agreement dated 29.08.2023

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 whereby the Liquidator has acknowledged the receipt of

Rs.433,16,59,509/- along with interest, in consideration

of the acquisition of the Corporate Debtor as a whole on a

going concern basis.

9. This Tribunal vide its order dated 11.09.2023 allowed the

reliefs and concessions sought by the Applicant in I.A.

No. 709 of 2023 under Group I, Group II and Group III

and granted liberty to file a fresh application for reliefs in

Group IV category. The relevant paras of order dated

11.09.2023 are reproduced below:

“4….Learned senior counsel for the Applicant

also submitted that the reliefs as categorized
under Group No. 4 also include the issue of
allowing carry forwarded losses after the
takeover as per the provisions of Section
79(2) of the Income Tax Act for which a notice
has already been issued to the Department
of Income Tax, particularly the Principal
Commissioner of Income Tax for giving him a
reasonable opportunity to place their say on
the matter: and since the Department of
Income Tax has been seeking adjournments

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 again and again, the decision thereon may
take time.

It is submitted that the successful bidder

intends to take control over the Corporate
Debtor and start its operation at the earliest
so as to save it from further deterioration.

In that context, it was prayed that, at least,

the prayers which are categorized under
Group No. 1. Group No. 2 & Group No. 3
could be considered by the Adjudicating
Authority and the decision thereon could be
given so that the successful bidder could
proceed ahead taking the appropriate step
for control and running of the Corporate
Debtor as a going concern at the earliest
possible.

He also submitted that the decision as

regards to the reliefs and concessions under
the category Group No. 4 could be taken later
on and rather, for that purpose, the Applicant
may file an application afresh which can be
dealt with and decided in due course of time.

7. It is also clarified that the unpaid

liabilities/existing share capital of the

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 Corporate Debtor, which are to be
extinguished as per the relief and
concessions granted hereinabove, are to be
credited into the "Capital Reserve" in
accordance with applicable Indian
Accounting Standards; and the accumulated
losses, if any, as per the balance sheet prior
to the date of acquisition will have to be
adjusted/set off as against such “capital
reserve". The balance amount of losses, if
any, can only be considered for carry
forward as per provisions of Section 79(2) of
the Income Tax Act, provided a reasonable
opportunity is given to the Principal
Commissioner of Income Tax.

8. The Applicant shall be at liberty to move a

fresh application as regards to the reliefs
and concessions listed under the category
Group No. 4 including that on as regards
carry forward losses subject to the
observations made hereinabove in para 7 of
this order.”

10. Therefore, the present application seeking reliefs and

concessions mentioned in Group IV category.

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 11. Reliance is placed by the Applicant on below mentioned

decisions:

a) Deepika Bhugra Prasad Vs. Shakambhari Ispat &

Power Limited (IA. No. 1305 of 2022 in 1284 of

2019) Shakambhari Ispat & Power Limited Vs.

Deepika Bhugra Prasad (IA. No. 1295 of 2022 in

1284 of 2019) (Kolkata Bench)

b) Shah Sponge and Power Limited Vs. Rajesh Kumar

Agarwal, liquidator of Divine Vidyut Limited (IA. No.

537/2022 in CP No. 891/2018) (Kolkata Bench)

c) Green Energy Solar Enterprise Pvt. Ltd. Vs. Konark

Power Projects Ltd. (IA No. 374 of 2021 in CP No.

314 of 2018) (Hyderabad Bench)

d) Sarda Mines Pvt. Ltd. Vs. Shailendra Ajmera

Liquidator-Kwality Limited (IA No. 5208 of 2021 in

IB-1440(ND)/2018) (New Delhi Bench)

e) Sherisha Technologies Pvt. Ltd. Vs. K. Sivalingam,

Liquidator of Cauvery Power Generation Chennai

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 Pvt. Ltd. (IA No. 558 of 2023 in CP No. 756 of 2019)

(Chennai Bench)

12. The Income Tax Department have filed its report before

this Tribunal on 10.01.2024 vide inward diary no. 271

wherein, it is stated as below:

“2. In this regard, A.O has submitted that

ITO, Ward 4(1)(1), Ahmedabad is having
territorial jurisdiction over Shirpur Power
Pvt. Ltd. company. On verification of online
data available in the Income-tax Business
Application (ITBA) of this office, it is noticed
that there is no demand outstanding in the
case of Shirpur Power Pvt. Ltd. having PAN:
AAKCS9158A as on the date. Furthermore,
there are no any proceedings pending as on
date in respect of the said assessee
company.

3. On verification of records available with

the A.., the A.O. has no objection to the
above process of liquidation subject to the
condition that provisions highlighted in
Section 72A, Section 72AA and Section 178
of the Act and other relevant provisions of
the Act are followed. In future, if it has been
observed by the A.O. that there has been
non-compliance of the above provisions of
the Act and any other relevant provisions of
the Act, then the Revenue will be at the
liberty to invoke relevant provisions of the
Act.

4. However, it is informed that the Income

Tax Department reserves its rights to invoke

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 the provisions of Income-tax Act in any
proceedings subsequent to the Liquidation,
if any happens, for which response is
sought to bring to tax any income arising as
a result of such liquidation in above-
mentioned assessee company and their
respective Shareholders and Creditors, if
any.”

13. We have heard the learned senior counsel for the

Applicant and considered the report filed by the Income

Tax Department.

14. It is observed that prayers mentioned in clause c(iv) to

(vii), clause (n) and clause (o) do not form part of category

IV mentioned in I.A. No. 709 of 2023 therefore, the same

cannot be considered as liberty was granted only with

respect to reliefs and concessions outlined in category IV.

15. Furthermore, concerning the prayer stated in clause (b),

the Applicant may approach the Liquidator, who shall

furnish it, contingent upon its availability.

16. All the other reliefs and concessions except those

enumerated in clause c(iv) to (vii), clause (n) and clause

(o) are sanctioned provided they are not in contravention

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 of the provisions of Income Tax Act and subject to

compliance of Section 72A, Section 72AA, Section 178

and other relevant provisions of the Income Tax Act,

1961.

17. The Income Tax Department shall be at liberty to initiate

appropriate course of action as per law if the reliefs and

concessions are not in accordance with the applicable

provisions of Income Tax Act.

18. Accordingly, IA/1243/NCLT/AHM/2023 stand disposed

off.

-Sd- -Sd-
SAMEER KAKAR SHAMMI KHAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Arati/LRA

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