In WPA 12285 of 2023 -CAL HC- Calcutta High Court quashes Income Tax proceedings against MSP Metallics Limited undergoing Corporate Insolvency Resolution Process
Justice Bibek Chaudhuri [25-05-2023]

Read Order: MSP Metallics Limited v. Assistant Commissioner of Income Tax & Ors.

Chahat Varma

New Delhi, June 29, 2023: In a recent ruling, the Calcutta High Court has quashed the income tax proceedings against MSP Metallics Limited, a company undergoing Corporate Insolvency Resolution Process (CIRP). The court observed that once the CIRP was admitted, no fresh civil or criminal proceedings can be initiated against the petitioner, and the pending proceedings must be stayed under Section 238 of the Insolvency and Bankruptcy Code (IBC).

In the present case, the petitioner had informed Assistant Commissioner of Income Tax (respondent no.1) that the Central Bank of India had filed a petition against the petitioner under Section 7 of the IBC and the prayer for CIRP was admitted by the NCLT. The cause of action to file the instant writ petition arose when by an order under Section 148(A)(d) of the Income Tax Act, the respondent no.1 held that the reply/submission of the petitioner was not tenable and not satisfactory and notice was issued under Section 148 of the Income Tax Act.

Consequently, the bench of Justice Bibek Chaudhuri ruled that the proceedings, including the impugned order and subsequent proceedings, are not legally sustainable and should be quashed.