# In the matter of S. Dhanapal vs. Income Tax Officer & Ors.

> NCLAT judgment dated 2026-04-02. Citation: TCN-2026-NCLAT-00077. The Appellant, a Liquidator, was appointed to oversee the liquidation process of M/s.…

- **Court:** NCLAT
- **Order date:** 2 Apr 2026
- **Citation:** TCN-2026-NCLAT-00077
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-chennai/s-dhanapal-vs-income-tax-officer-ors-cc689eec

## Summary

### Background

The Appellant, a Liquidator, was appointed to oversee the liquidation process of M/s. Servalakshmi Paper Limited. During the liquidation, assets were sold, and the proceeds were kept in a fixed deposit with the State Bank of India. The bank deducted TDS from the interest accruing on the fixed deposit.

## Facts

The Appellant is the Liquidator of M/s. Servalakshmi Paper Limited (In Liquidation).

The Corporate Debtor's assets were sold through an e-auction, realizing Rs. 105 Crores.

The sale proceeds were kept in a fixed deposit with the State Bank of India (Respondent No. 2).

Respondent No. 2 deducted TDS from the interest accruing on the fixed deposit.

The Appellant requested Respondent No. 2 to refund the TDS and not deduct it in the future.

The Appellant filed an application before the Adjudicating Authority seeking a direction for the Income Tax Department to refund the TDS.

The Adjudicating Authority directed the Liquidator to submit a simplified account to the Income Tax Authorities.

The Appellant challenged the Adjudicating Authority's order before the Appellate Tribunal.

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## Issues and analysis

### Issue 1: Whether the TDS deducted from the interest …

**Ratio:** The Appellate Tribunal did not directly address the lawfulness of the TDS deduction,

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**Reasoning:** The Tribunal reasoned that the issue of TDS refund falls within the domain of the Income

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**Interpretation:** The Tribunal interpreted that the Income Tax Authorities are the competent

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**Application:** The Tribunal directed the Appellant to approach the Income Tax Authorities with

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** S. DHAN…
- **Respondents:** Servalakshmi…; Income Tax…; +1 more
- **Other parties:** M/s. Shakti…
- **Advocates:** S. Sa…; Raj Jha…

## Timeline

- **2018-04-24 — Order by NCLT, Chennai…**: Order passed by Ld. NCLT, Chennai Bench, in CA/152/IB/2018, appointing the Appellant as…
- **2017-06-21 — Admission o…**: Admission of the CIRP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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