A growing conflict between India's Insolvency and Bankruptcy Code (IBC) and tax laws is causing significant uncertainty for companies undergoing resolution. Tax authorities are increasingly denying the benefit of carrying forward past losses even after plans are approved by the National Company Law Tribunal (NCLT). Under the IBC, stressed companies are taken over by new owners who often factor in accumulated losses to reduce future tax liabilities. However, these benefits are now being challenged. According to Vivek Jalan, a partner at Tax Connect Advisory, the Income-tax Act restricts loss carry-forward if there is a major change in shareholding, which is common in insolvency cases. An exception exists for ownership changes through approved IBC plans, but it requires that tax authorities be given a chance to present their views before approval. This has led to cases where tax authorities deny benefits, claiming they were not properly notified. Experts like Parag Rathi emphasize that this inconsistency stems from a gap in legal design, as the insolvency framework does not mandate notification of tax officials. The Supreme Court's ruling in the Ghanshyam Mishra case confirmed that approved IBC plans are binding on all stakeholders, including tax authorities. However, the Income Tax Appellate Tribunal's ruling in the JSW Steel case indicated that tax authorities still need a proper hearing under Section 79. This disconnect is creating uncertainty for bidders, who must now consider the risk of losing expected tax benefits, prompting calls for clearer rules to ensure predictability in the insolvency process.