The IBBI said an insolvency practitioner responsible for the voluntary liquidation process does not have to request a certificate of no objection from the Income Tax Department during the process.
The Insolvency and Bankruptcy Board of India (IBBI) clarification comes in cases where even after offering the option to file claims, liquidators request a ‘Certificate of No Objection’ (NOC) or ‘Certificate of No Objection’. -contribution â(NDC) of the department tax.
The Insolvency and Bankruptcy Code or the regulations do not contemplate soliciting such an AC / NDC.
In a circular dated November 15, the IBBI cited section 178 of the Income Tax Act, 1961.
The article obliges the liquidator to fulfill certain requirements related to income tax, explicitly states that the provisions of this article will have effect notwithstanding any provision to the contrary contained in any other law in force at the present time, except of the provisions of the Code.
The process of applying and obtaining such a NOC / NDC from the Income Tax Department takes considerable time and therefore militates against the express provisions of the Code, and also runs counter to the goal of time-bound completion of the process under the Code, ‘”said the circular.
The IBBI has stated that, in accordance with the provisions of the Code and regulations read with Section 178 of the Income Tax Act, an insolvency practitioner in charge of the voluntary liquidation process is not required to request an AC / NDC from the tax department as part of the compliance in said deal.
The circular was sent to registered insolvency professionals, recognized insolvency professional entities and registered insolvency professional agencies.
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