IN THE NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD COURT - 2 ITEM No.301 IA/678(AHM)2022 in CP(IB) 149 of 2017 Order under Section 35(1)(n) r.w 60(5) IBC r.w Rule 11 of NCLT Rules, 2016 IN THE MATTER OF:

Sunil Kumar Agarwal Liquidator for Varia Emgineering ........Applicant Works Pvt Ltd ........Respondent V/s Chief Commissioner of Income Tax (TDS), Ahmedabad Order delivered on 11/12/2023 Coram:

Mrs. Chitra Hankare, Hon’ble Member(J)

Dr. Velamur G Venkata Chalapathy, Hon’ble Member(T)

ORDER

The case is fixed for pronouncement of order.

The order is pronounced in open Court vide separate sheet.

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DR. V. G. VENKATA CHALAPATHY CHITRA HANKARE MEMBER (TECHNICAL) MEMBER (JUDICIAL)

IN THE NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD (COURT - II)

IA No. 678 of 2022 IN CP(IB) No. 149 / NCLT / AHM / 2017 (Filed under Section 35(1)(n) r/w 60(5)(c) of the Insolvency &

Bankruptcy Code, 2016 r.w Rule 11 of the NCLT Rules, 2016)

IN THE MATTER BETWEEN Sunil Kumar Agarwal Liquidator of Varia Engineering Works Pvt. Ltd. … Applicant Vs.

Chief Commissioner of Income Tax (TDS), Ahmedabad … Respondent Order pronounced on 11.12.2023 Coram:

MRS. CHITRA HANKARE HON’BLE MEMBER (JUDICIAL)

MR. VELAMUR G VENKATA CHALAPATHY HON’BLE MEMBER (TECHNICAL)

MEMO OF PARTIES Sunil Kumar Agarwal Liquidator of Varia Engineering Works Pvt. Ltd.

Reg. No. IBBI/IPA-001/IP-P01390/2018-19/12178 Having Office At:

Tower 6/603, Devnandan Heights, Near Podar School, New CG Road, Chandkheda, Ahmedabad-382424 … Applicant Versus Chief Commissioner of Income Tax (TDS), Ahmedabad Having Address At:

Navjeevean Trust Building, B/h Gujarat Vidhyapith, Ashram Road, Ahmedabad-380014 … Respondent Present:

For the Applicant : Mr., Vishal Dave, Adv. a.w. Ms. Pragati Tiwari, Adv. Mr. Nandish Chudgar, Adv., Mr.

Aravindakshan V. Nair, Adv.

For the Respondent : Mr. Maithili Mehta, Adv.

JUDGEMENT

1. This is an application filed under Section 35(1)(n) read with Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC” ) read with Rule 11 of the NCLT Rules for refund of amount of TDS deducted by the Income Tax Authorities.

Facts of the case:

2. Bank of Baroda filed application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Resolution Process against Varia Engineering Works Private Limited. In application bearing CP(IB) No.149 of 2017, CIRP was initiated by an order dated 21.12.2017. In pursuant to CIRP process the order for liquidation of company was passed on 22.07.2019 by appointing applicant as a liquidator. Accordingly, the applicant sold assets of Corporate Debtor by conducting various e-auctions. Sale Certificates were also issued to successful bidders. The applicant further stated that multiple amounts of TDS to the extent of total amount of Rs.28,92,101/- were deducted as per provisions of Income Tax Act by the successful purchasers. The applicant further submitted that the provisions of Section 194-IA of Income Tax are inconsistent with provision of Section 53 (1)(e) of the IBC.

3. The applicant demanded access to Income Tax Portal of Corporate Debtor but Deputy Commissioner of Income Tax did not grant access to it and call him in office. During the liquidation process, the liquidator is only bound to prepare receipts of payments and cannot file a return of Corporate Debtor. In such a case, TDS would remain unclaimed in the account of Corporate Debtor. Hence, prayed for directing Income Tax Department to credit the amount of Rs.28,92,101 deducted as TDS into the account of Corporate Debtor.

Reply:

4. The Income Tax Department stated that Section 194-IA of Income Tax Act does not bring within its purview any rising demand which is to be collected by the department including tax deducted at source. The provision is in the nature of prepaid tax. It is duty of purchaser to credit the said amount of TSD before the department. Liquidation proceedings against the Corporate Debtor does not exempt Corporate Debtor in filing its return nor does it exemp