# In the matter of Harish Chander Arora Liquidator of Rathi Super Steel Ltd. vs. The Principal Commissioner of Income Tax, Ghaziabad, & Anr.

> NCLAT judgment dated 2024-12-02. Citation: TCN-2024-NCLAT-00050. The appeal challenges an order dated 2023-09-13 by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 2 Dec 2024
- **Citation:** TCN-2024-NCLAT-00050
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/harish-chander-arora-liquidator-of-rathi-super-steel-ltd-vs-the-principal-commis-133e25ec

## Summary

### Background

The appeal challenges an order dated 2023-09-13 by the National Company Law Tribunal (NCLT), New Delhi, which dismissed an application filed by the Liquidator. The application sought a direction for the Respondent to return Rs. 20,50,000 to the Corporate Debtor's account, arguing the amount belonged to the CD and couldn't be adjusted against the CD's outstanding demand for AY 2011-12.

## Facts

The Corporate Debtor, Rathi Super Steel Limited, faced scrutiny under Section 148 of the Income Tax Act for AY 2011-12. An assessment completed on 2018-12-31 resulted in a demand of Rs. 37506040. The Corporate Debtor appealed but was required to pay 20% of the outstanding amount (Rs. 7501208). The Income Tax Department seized Rs. 20,50,000 in 2012. The Respondent adjusted Rs. 7501208 on 2019-03-31. The CIRP was initiated on 2019-06-12. The Liquidator filed an application seeking the return of Rs. 20,50,000, arguing it belonged to the Corporate Debtor and couldn't be adjusted against outstanding demands. The NCLT dismissed the application, and the Liquidator appealed to the NCLAT.

## Issues and analysis

### Issue 1: Whether the amount seized by the Department for the year 2011-12 could be adjusted even after the …

**Ratio:** The principle is that adjustments made

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**Reasoning:** The court reasoned that the amount in question was seized in the year 2011-12 and had

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**Interpretation:** This case interprets the interaction between income tax law and insolvency law,

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**Application:** Since the adjustment occurred before the CIRP initiation, the court found that

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…
- **Appellants:** Harish Chander…
- **Respondents:** Rathi Super Steel…; The Principal…

## Timeline

- **2012-01-01 — Amount S…**: The amount in question was seized by…
- **2018-12-31 — Assessment Co…**: Assessment for A.Y. 2011-12 was completed,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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