The Burdens of a Successful Resolution Applicant under IBC

 The Burdens of a Successful Resolution Applicant under IBC 

Sec. 29A (b) of IBC, 2016 says that a person shall not be eligible to submit a resolution plan, if such person, or any other person acting jointly or in concert with such person is a wilful defaulter in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949.  Sec. 32 of IBC, 2016 says that any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in sub-section (3) of section 61 of IBC.

There are some complex situations which even successful Resolution Applicants might face once they succeed in getting their applications allowed.

In the case of GMSRA Infracon Pvt. Ltd v Shreebhav Polyweaves Pvt. Ltd. & Ors. [2024] GCtR 451 (NCLAT) it was argued by RA that RA was entitled to carry forward its accumulated losses as per Section 79(2) of the Income Tax Act and its resolution plan has included all these aspects. The NCLT had already issued notice to the Income Tax Department and heard. It was the argument of RA that benefit of Section 79(2) of Income-tax Act, 1961 for carry forward the accumulate losses has to be extended to the RA, however, the NCLT has issued direction to the Successful Resolution Application to approach the concerned statutory authority for the concessions.

NCLAT agreed with the view of NCLT that in event the RA is entitled for benefit of Section 79(2) to carry forward accumulated losses, it shall be open for RA to file an appropriate application before the competent jurisdictional Income Tax Authority to claim the benefit.

Therefore, GMSRA Infracon Pvt. Ltd v Shreebhav Polyweaves Pvt. Ltd. & Ors. [2024] GCtR 451 (NCLAT) has brought forth the compliance burdens which gets linked with proceedings under IBC, 2016 and how and to what extent they are overtaken by a successful Resolution Applicant.