Extraordinary Delay of 1305 Days in Filing Claim Not Condoned; Resolution Plan Remains Unaffected
The National Company Law Tribunal (NCLT), Chandigarh Bench, has dismissed an application filed by the Deputy Commissioner of Income Tax seeking condonation of a delay in filing a claim during the Corporate Insolvency Resolution Process (CIRP) of a corporate debtor. The judgment, rendered by Mr. Khetrabasi Biswal, Member (Judicial), and Mr. Shishir Agarwal, Member (Technical), underscores the importance of adhering to the timelines prescribed under the Insolvency and Bankruptcy Code, 2016 (IBC), and the associated CIRP Regulations.
The application, filed under Section 60(5) of the IBC, sought to condone a delay of 1305 days in filing a claim of Rs. 975.56 crore in outstanding income tax dues. The Income Tax Department argued that it was unaware of the initiation of CIRP until October 2025, which led to the delayed submission of its claim in October 2025. However, the Resolution Professional (RP) had already rejected the claim on the grounds of exceeding the prescribed timelines and the subsequent approval of the Resolution Plan by the Committee of Creditors in April 2023.
In dismissing the application, the Tribunal emphasized that the timelines under the IBC are crucial for ensuring a time-bound insolvency resolution process. The court noted that the Income Tax Department, despite being a statutory creditor, failed to demonstrate due diligence in monitoring the CIRP proceedings, which were publicly announced in June 2022.
The Tribunal further clarified that even if there was an omission by the RP in notifying the statutory creditor, it does not justify reopening the CIRP post-approval of the Resolution Plan. The decision aligns with the principles of maintaining certainty and finality in insolvency proceedings as reiterated in various judgments, including those by the Hon'ble Supreme Court.
The Tribunal's ruling reinforces the established legal framework that once a Resolution Plan is approved by the Committee of Creditors, introducing new claims or reopening settled positions would disrupt the commercial decisions already made, thus defeating the purpose of the IBC. Consequently, the Tribunal found no merit in the Income Tax Department's plea and upheld the RP's decision to reject the claim.
Bottom line:-
Insolvency and Bankruptcy Code - Delay in filing claim by statutory creditor - Extraordinary delay of 1305 days not condoned - Claim filed after approval of Resolution Plan cannot be entertained.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 60(5), Section 14; CIRP Regulations
