IBC Resolution Plan Approval Bars Penalties Under Income Tax Act: Gujarat High Court

The Gujarat High Court ruled that once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016, penalty proceedings under Sections 270A, 271(1)(c), and 271AAC(1) of the Income Tax Act, 1961 cannot be initiated for claims not included in the plan.

In the case of Technovaa Plastic Industries Pvt. Ltd., income tax dues for assessment years 2012–13 and 2013–14 were not part of the approved plan and thus stood extinguished.

The court quashed all related demand notices, affirming that no proceedings can be initiated for dues excluded from the resolution plan.