# In the matter of Principal Commissioner of Income Tax Central - 2, Chennai Vs. C. Ramasubramaniam, Resolution Professional for Surana Corporation Ltd. CA(AT)(Ins) No. 1290 of 2019

> NCLAT judgment dated 2019-12-13. Citation: TCN-2019-NCLAT-00021. The Principal Commissioner of Income Tax Central – 2, Chennai filed an application to set…

- **Court:** NCLAT
- **Order date:** 13 Dec 2019
- **Citation:** TCN-2019-NCLAT-00021
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/principal-commissioner-of-income-tax-central-2-chennai-vs-c-ramasubramaniam-reso-e4bec79f

## Summary

### Background

The Principal Commissioner of Income Tax Central – 2, Chennai filed an application to set aside an order dated 19th September 2019, which pertained to an Income Tax Department order dated 4th October 2018, regarding the attachment of a refund. This attachment was initially valid for six months under Section 281B(2) of the Income Tax Act, 1961. The Adjudicating Authority noted that the six-month period had expired on 3rd April 2019, and the Corporate Debtor was under liquidation. Consequently, the authority declined to extend the attachment order and directed the Income Tax Department to release the refund amount of Rs.4,20,76,684/- to the accounts of the Assessee/Corporate Debtor – M/s Surana Corporation Limited within six weeks.

## Facts

The Principal Commissioner of Income Tax Central – 2, Chennai, sought to set aside an order that had previously attached a tax refund due to M/s Surana Corporation Limited. The initial attachment order, issued by the Income Tax Department on 4th October 2018, was valid for six months under Section 281B(2) of the Income Tax Act, 1961. The Adjudicating Authority observed that the six-month validity period expired on 3rd April 2019, and Surana Corporation was under liquidation. Consequently, the Adjudicating Authority declined to extend the attachment and ordered the Income Tax Department to release the refund of Rs.4,20,76,684/- to Surana Corporation within six weeks. The Principal Commissioner of Income Tax, claiming to be a secured creditor, appealed this decision. The

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## Issues and analysis

### Issue 1: Whether the Principal Commissioner of Income Tax can claim to be a secured creditor while also …

**Ratio:** The legal principle is based on the provisions of the Income Tax Act and the Insolvency

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**Reasoning:** The court reasoned that while the Appellant claimed to be a secured creditor under the

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**Interpretation:** This issue involves interpreting the interplay between the Income Tax Act, the

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**Application:** The court applied this reasoning by allowing the Appellant to make a claim

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…; +1 more
- **Appellants:** Principal…
- **Respondents:** SURANA CORPORATION…; C. Ramasubramaniam…
- **Advocates:** Lakshmi G…; Easha K…; +1 more

## Timeline

- **2018-10-04 — Income Tax Department…**: Income Tax Department issued an order for the attachment of a refund due to Surana…
- **2019-04-03 — Expiry of Attachment…**: The six-month validity period of…

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