{"id":5953,"date":"2023-06-30T08:06:07","date_gmt":"2023-06-30T08:06:07","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=5953"},"modified":"2024-06-23T18:48:17","modified_gmt":"2024-06-23T18:48:17","slug":"nclat-no-tds-on-purchasing-property-during-liquidation","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/","title":{"rendered":"NCLAT : No TDS on purchasing property during liquidation"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4853\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/08\/Immediate-Effects-of-Liquidation-Order-by-NCLT..jpg\" alt=\"Immediate Effects of Liquidation Order by NCLT.\" width=\"1177\" height=\"659\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e018a4b69ef\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e018a4b69ef\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#No_TDS_on_purchasing_property_during_liquidation_NCLAT\" title=\"No TDS on purchasing property during liquidation : NCLAT\u00a0\">No TDS on purchasing property during liquidation : NCLAT\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#National_Company_Law_Appellate_Tribunal_order\" title=\"National Company Law Appellate Tribunal order\">National Company Law Appellate Tribunal order<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#Indian_Financial_Consultancy_Corporation_Pvt_Ltd_%E2%80%93_IBC_Services\" title=\"Indian Financial Consultancy Corporation Pvt Ltd &#8211; IBC Services\">Indian Financial Consultancy Corporation Pvt Ltd &#8211; IBC Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#Corporate_Insolvency_Resolution_Process_CIRP_Support\" title=\"Corporate Insolvency Resolution Process (CIRP) Support\">Corporate Insolvency Resolution Process (CIRP) Support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#Liquidation_Process_Support\" title=\"Liquidation Process Support\">Liquidation Process Support<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/nclat-no-tds-on-purchasing-property-during-liquidation\/#Personal_Insolvency_Process_Support\" title=\"Personal Insolvency Process Support\">Personal Insolvency Process Support<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"No_TDS_on_purchasing_property_during_liquidation_NCLAT\"><\/span><span style=\"color: #000080;\">No TDS on purchasing property during liquidation : <\/span><span style=\"color: #000080;\">NCLAT\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Companies Liquidation is set to get easier with the National Company Law Appellate Tribunal throwing out taxman\u2019s claims that the Companies Liquidation has to get TDS while bankrupt company during liquidation under Insolvency and Bankruptcy Code, 2016. .<\/p>\n<p>The National Company Law Appellate Tribunal ruled the liquidator is not needed to make a P &amp; loss a\/c &amp; balance sheet along with audit during the liquidation or bankrupt company during liquidation process. (In the matter S Kumars Nationwide vs Chief CIT)<\/p>\n<p>Two judge benches of Jarat Kumar Jain &amp; Ashok Kumar Mishra said in National Company Law Appellate Tribunal order that, We are of the view that the Companies Liquidator in liquidation under the <a href=\"https:\/\/www.caindelhiindia.com\/blog\/category\/ibc\/\">Insolvency and Bankruptcy Code, 2016<\/a> is not needed to submit ITR return, then there is no question mark of claiming income Tax refund,\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"National_Company_Law_Appellate_Tribunal_order\"><\/span><span style=\"color: #000080;\">National Company Law Appellate Tribunal order<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Two judge benches of National Company Law Appellate Tribunal order was passed on Monday stating that any buyer of property from a Companies liquidator during Insolvency and Bankruptcy Code, 2016 \u00a0shall not be required to deduct and pay one percentage Tax deducted at source from the sale consideration u\/s 194-IA of the Income-tax Act, 1961.<\/p>\n<p>The bench also observed that one percentage Tax deducted at source once deducted could not be claimed as refund during liquidation process without filing of return of income of the company under liquidation.\u00a0 This landmark case will set a precedent, making the liquidation process easy,<\/p>\n<p>This National Company Law Appellate Tribunal order has permanently removed this difficulty, i.e. TDS was detrimental to the interest of creditors which may adversely affect recovery under liquidation process.<\/p>\n<p>The Income tax authority not to deduct one percentage Tax deducted at source from sale consideration of INR 43 Cr on the premise that income tax dues can be recovered by the department as per waterfall mechanism set out under Insolvency and Bankruptcy Code, 2016.<\/p>\n<p>Income tax provision of Tax deduction is inconsistent, said the National Company Law Appellate Tribunal court, citing \u201cover-riding\u201d effect of different legal provisions. The scheme of <a href=\"https:\/\/www.caindelhiindia.com\/blog\/category\/ibc\/\">Insolvency and Bankruptcy Code, 2016<\/a> &amp; its regulations does not needed a liquidator to prepare audited financial statements during liquidation process. Since it is the purchaser&#8217;s responsibility to credit TDS to the Income Tax Department against Permanent Account Number\u00a0 of the CD, the <a href=\"https:\/\/carajput.com\/archives\/tds-not-required-us-194ia-on-sale-of-property-under-liquidator-ibc.pdf\">deduction of TDS<\/a> does not equate to payment of Govt dues in priority to other creditors because it is not a Tax demand for realisation of Tax dues. As a result, the application was denied by the Ld. Adjudicating Authority on June 11, 2020.<\/p>\n<p>The National Company Law Appellate Tribunal court stated: \u201cIt is clear that when the Companies Liquidation process is wound up under the orders of National Company Law Tribunal\u00a0 or National Company Law Appellate Tribunal Court or otherwise, the Income ax Return shall be ensure tax deposit and verified by the Companies Liquidator,\u201d<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Indian_Financial_Consultancy_Corporation_Pvt_Ltd_%E2%80%93_IBC_Services\"><\/span><span style=\"color: #000080;\"><strong>Indian Financial Consultancy Corporation Pvt Ltd &#8211; IBC Services<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Our specialized services ensure that the IRPs, RPs, &amp; Liquidators meet the rigorous requirements of the IBC 2016 &amp; its associated regulations.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Corporate_Insolvency_Resolution_Process_CIRP_Support\"><\/span><span style=\"color: #000080;\">Corporate Insolvency Resolution Process (CIRP) Support<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>We provide comprehensive support to IRPs and RPs throughout the CIRP. Our services include:<\/p>\n<ul>\n<li>Drafting and compiling the necessary documents to invite and evaluate potential resolution applicants.<\/li>\n<li>Preparing detailed reports for the formation and management of the CoC.<\/li>\n<li>Developing and maintaining the IM, ensuring it includes all relevant details for potential investors.<\/li>\n<li>Drafting RFRPs to invite resolution plans from interested parties.<\/li>\n<li>Assisting in organizing, convening, and holding CoC meetings, including agenda preparation, minutes recording, and regulatory compliance.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Liquidation_Process_Support\"><\/span><span style=\"color: #000080;\">Liquidation Process Support<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>During the liquidation process, our expert team aids Liquidators with:<\/p>\n<ul>\n<li>Drafting the initial report outlining the company&#8217;s assets, liabilities, and claims.<\/li>\n<li>Creating a detailed inventory of the corporate debtor&#8217;s assets for liquidation.<\/li>\n<li>Regularly updating and filing progress reports as per IBC requirements.<\/li>\n<li>Preparing comprehensive documentation for conducting electronic auctions of the debtor&#8217;s assets.<\/li>\n<li>Ensuring all actions taken during liquidation comply with IBC 2016 and subsequent regulations.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Personal_Insolvency_Process_Support\"><\/span><span style=\"color: #000080;\">Personal Insolvency Process Support<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>We extend our specialized services to support the personal insolvency process, including:<\/p>\n<ul>\n<li>Preparing and submitting detailed reports as required under Section 99 of the IBC.<\/li>\n<li>Making necessary public announcements following the issuance of a Section 100 order.<\/li>\n<li>Managing communications with creditors and other stakeholders.<\/li>\n<li>Compiling and filing a comprehensive list of creditors with the Adjudicating Authority (AA).<\/li>\n<li>Handling all related compliances to ensure adherence to IBC norms.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Contact Information-\u00a0Indian Financial Consultancy Corporation Pvt Ltd<\/strong><\/span><\/p>\n<ul>\n<li><strong>Phone:<\/strong> <a rel=\"noreferrer\">Call @ 9555 555 480\u00a0<\/a><\/li>\n<li><strong>Email:<\/strong> <a rel=\"noreferrer\">Singh@caindelhiindia.com<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>No TDS on purchasing property during liquidation : NCLAT\u00a0 Companies Liquidation is set to get easier with the National Company Law Appellate Tribunal throwing out taxman\u2019s claims that the Companies Liquidation has to get TDS while bankrupt company during liquidation under Insolvency and Bankruptcy Code, 2016. . The National Company Law Appellate Tribunal ruled the &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[658],"tags":[991,729],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5953"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=5953"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5953\/revisions"}],"predecessor-version":[{"id":7433,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/5953\/revisions\/7433"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=5953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=5953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=5953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}