Clarification regarding requirement of seeking NOC or No Dues Certificate from the Income Tax Department during Voluntary Liquidation Process

Last updated: 18 November 2021

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This circular clarifies that insolvency professionals managing voluntary liquidation processes under the Insolvency and Bankruptcy Code, 2016, are not required to obtain a No Objection Certificate (NOC) or No Dues Certificate (NDC) from the Income Tax Department. While Section 178 of the Income-tax Act has certain requirements, the Code takes precedence. Seeking these certificates can cause significant delays, contradicting the Code's objective of time-bound completion.

Insolvency and Bankruptcy Board of India 7thFloor, Mayur Bhawan, Connaught Place, New Delhi-110001 CIRCULAR No. IBBI/LIQ/45/2021 15thNovember, 2021 To All Registered Insolvency Professionals All Recognised Insolvency Professional Entities All Registered Insolvency Professionals Agencies (By mail to registered email addresses and on website of the Board) Dear Madam /Sir, Subject: Clarification regarding requirement of seeking No Objection Certificate or No Dues Certificat

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FAQ :

No, as per the Insolvency and Bankruptcy Code, 2016, and its regulations, an insolvency professional is not required to seek a No Objection Certificate (NOC) or No Dues Certificate (NDC) from the Income Tax Department during a voluntary liquidation process.

The IBC and its regulations do not mandate seeking an NOC or NDC from the Income Tax Department for voluntary liquidation. The Code's provisions supersede other laws in this regard.

The process of obtaining an NOC or NDC from the Income Tax Department can be time-consuming and delays the voluntary liquidation process, which is intended to be completed within a specific timeframe as per the Code.

Yes, Section 178 of the Income-tax Act, 1961, has certain requirements related to income tax. However, its provisions are effective notwithstanding anything to the contrary in any other law, except for the provisions of the Insolvency and Bankruptcy Code, 2016.

This clarification was issued by the Insolvency and Bankruptcy Board of India (IBBI) through Circular No. IBBI/LIQ/45/2021 dated 15th November, 2021.

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Notification No : IBBI/LIQ/45/2021
Published in Corporate Law
Source : https://ibbi.gov.in//uploads/legalframwork/cc881169aad7ee239aea7954505a76ab.pdf

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