# In the matter of Surana Corporation Ltd. MA-143-2019 in CP-550- (IB)-2018

> NCLT judgment dated 2019-07-02. Citation: TCN-2019-NCLT-02720. The case involves an application filed by the Resolution Professional seeking the withdrawal of…

- **Court:** NCLT
- **Order date:** 2 Jul 2019
- **Citation:** TCN-2019-NCLT-02720
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/surana-corporation-ltd-ma-143-2019-in-cp-550-ib-2018-aac08907

## Summary

### Background

The case involves an application filed by the Resolution Professional seeking the withdrawal of an order of attachment of refund issued by the Income Tax Department against the Corporate Debtor, Surana Corporation Limited, under Section 281B of the Income Tax Act, 1961. The applicant also sought the release of a refund of Rs.4,20,76,684/- to the applicant.

## Facts

The Resolution Professional filed an application to withdraw the Income Tax Department's attachment order on a refund due to Surana Corporation Limited, the Corporate Debtor. The refund amount is Rs.4,20,76,684/-. The Income Tax Department had issued the attachment order on 04.10.2018, valid for six months, expiring on 03.04.2019. Surana Corporation Limited is currently under liquidation. The Resolution Professional argued for the release of the refund to the Corporate Debtor's accounts. The relevance of these facts lies in the interplay between the attachment order, its expiry, the liquidation proceedings, and the need to release funds to the Corporate Debtor.

## Issues and analysis

### Issue 1: Whether the Income Tax Department's attachment order on the refund of Rs.4,20,76,684/- to Surana …

**Ratio:** The attachment order's validity expired after six months, as per Section 281B(2) of the

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**Reasoning:** The court reasoned that since the attachment order had expired and the Corporate Debtor

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**Interpretation:** Section 281B(2) of the Income Tax Act, 1961, limits the validity of attachment

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**Application:** Given the expiry of the attachment order on 03.04.2019 and the ongoing

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** C. Ramasubr…
- **Respondents:** Surana Corporation…; THE DEPUTY…

## Timeline

- **2018-10-04 — Attachment…**: The Income Tax Department passed an…
- **2019-04-03 — Expiry of Attachment…**: The attachment order…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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