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Judgment
CA 721 of 2020 filed in IB 401 of 2017.
The present application has been filed under Section 60(5) of the IBC 2016. The Counsel for the Resolution Professional prayed for a direction to the Income-Tax Dept. to refund the entire amount of Rs. 1,24,54,364/- debited by the I.T. department during the CIRP from the bank accounts of the Corporate Debtor maintained by the Resolution Professional. The detail of the amount is as follows;
Date
Amount Debited (INR)
Bank
Account No.
12/6/2018
1,02,744
Kotak Mahindra
5.88011E+11
19/07/2018
49,158
Bank of Maharashtra
60097898876
27/07/2018
1,32,829
Indian Bank
6084668353
27/07/2018
1,08,02,280
Indian Bank
6084668353
31/08/2018
32,547
Kotak Mahindra
5.88011E+11
5/9/2018
53,748
HDFC Bank
5.02E+13
26/10/2018
12,48,511
HDFC Bank
1.59286E+13
19/11/2018
32,547
Kotak Mahindra
5.88011E+11
Total
1,24,45,364
The reason stated in the CA is that during the CIRP the Respondent were not authorized to debit any amount which is available with the Corporate Debtor for the purpose of seeking any Resolution Plan. It is further averred that the provision of Section 238 of the IBC 2016 override the provisions of the Income-Tax Act 1961. The reference is made to the observation of the Hon'ble Supreme Court made in the matter of Pr. Commissioner of Income-Tax vs. Monnet Ispat and Energy Ltd. in SLP (c) No. (6483/2018) wherein it has has been observed that Section 238 of IBC overrides the provisions of the Income-Tax Act 1961.
The Representative for the Income-Tax Deptt., has filed reply affidavit stating therein that the Income-Tax Dept. has filed the claim before the Interim Resolution Professional for an amount of Rs. 64,05,45,281/- in Form 'B' which has been admitted. But in order to discharge the official functions, the accounts of the Corporate Debtor were freezed. It is also recorded in the reply that no transaction was made by the department with respect to the bank accounts of the company, but the banks were advised to mark lieu on the accounts.
It is admitted factual position that CIRP was initiated against the Corporate Debtor viz., M/s. Earth Infrastructure Ltd. on 6.6.2018 and the Respondent viz. Income-Tax Dept. has debited/freezed and marked lien on the accounts on various dates during the moratorium, which is in violation of the moratorium.
In view of the factual and legal position stated above, the application filed by the Resolution Professional is hereby allowed. The Income Tax Department, Central Circle-28, New Delhi and Tax Recovery Officer, CIT (TDS-1) are directed to refund the entire amount of Rs. 1,24,54,364/- debited along with interest accrued thereon till the date of refund of entire amount and file an affidavit of compliance in the Registry within two weeks from the date the copy of this order is received. Consequently, orders of defreezing/marking of lien on the accounts of the CD by the Income Tax Department are hereby set aside.
A copy of this order free of cost shall be provided to the Income-Tax Deptt. - Central Circle -28 (Income-Tax Dept.) and TDS-1 by the counsel representing the RP for information and compliance. Accordingly, the application stands disposed off.