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Insolvency and Bankruptcy Board of India
7th Floor, Mayur Bhawan, Connaught Place, New Delhi-110001
CIRCULAR
No. IBBI/LIQ/45/2021 15th November, 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 Certificate from the Income Tax Department during Voluntary Liquidation Process
under the Insolvency and Bankruptcy Code, 2016 (Code).
Regulation 14 of the IBBI (Voluntary Liquidation Process) Regulations, 2017 (the
Regulations) mandates the liquidator to make the public announcement within five days of his
appointment, calling for submission of claims by stakeholders within thirty days from the
liquidation commencement date. The Regulations also obligate all the financial creditors,
operational creditors including government, and other stakeholders to submit their claims
within the specified period. If the claims are not submitted in time, the corporate person may
get dissolved without dealing with such claims and such claims may consequently get
extinguished.
2. It has been noticed that even after providing opportunity for filing of claims, the liquidators
seek 'No Objection Certificate' (NOC) or 'No Dues Certificate' (NDC) from the Income Tax
Department despite the fact that the Code or the Regulations do not envisage seeking such
NOC/NDC.
3. In this regard, section 178 of the Income-tax Act, 1961 which, inter alia, obligates the
liquidator to fulfil certain income tax related requirements, explicitly states that the provisions
of this section shall have effect notwithstanding anything to the contrary contained in any other
law for the time being in force except the provisions of the Code.
4. The process of applying and obtaining of such NOC/NDC from the Income Tax Department
consumes substantial time and thus militates against the express provisions of the Code, and
also defeats the objective of time-bound completion of process under the Code.
5. Therefore, it is hereby clarified that as per the provisions of the Code and the Regulations
read with Section 178 of the Income-tax Act, 1961, an Insolvency Professional handling
voluntary liquidation process is not required to seek any NOC/NDC from the Income Tax
Department as part of compliance in the said process.
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6. This Circular is issued in exercise of the powers under section 196 of the Code.
Yours sincerely,
Sd/-
(Nitish Saini)
Assistant General Manager
Tel: 011-2346 2834
Email: nitish.saini87@gov.in
