# In the matter of Nicco Corporation Limited

> NCLT judgment dated 2024-02-01. Citation: TCN-2024-NCLT-02821. The case involves an application filed by the Liquidator of Nicco Corporation Limited (in…

- **Court:** NCLT
- **Order date:** 1 Feb 2024
- **Citation:** TCN-2024-NCLT-02821
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nicco-corporation-limited-1b1efb73

## Summary

### Background

The case involves an application filed by the Liquidator of Nicco Corporation Limited (in liquidation) against the Income Tax Authorities, seeking the refund of Rs. 54,40,064/- which was allegedly wrongfully adjusted against purported tax dues of the Corporate Debtor. The Adjudicating Authority had directed the Corporate Debtor to undergo liquidation on 17 October 2017, and Mr. Vinod Kumar Kothari was appointed as the Liquidator. The Income Tax Department adjusted the refund for the assessment year 2019-2020 against outstanding demands pertaining to assessment years prior to the liquidation commencement date. The Liquidator contended that the Income Tax Department should have filed its claim in the liquidation proceedings and cannot exercise its right under Section 245

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## Facts

On 17 October 2017, Nicco Corporation Limited was directed to undergo liquidation, with Vinod Kumar Kothari appointed as the Liquidator. The Liquidator filed Income Tax Returns for the assessment year 2019-2020. On 08 May 2020, the Liquidator received an order stating that a sum of Rs. 54,40,064/- was due as an Income Tax refund. On 09 May 2020, another notice stated that the refund would be adjusted against outstanding demands for assessment years 2008, 2009, 2011, 2012, 2013, and 2016, which were prior to the liquidation commencement date. The Liquidator objected, arguing that the Income Tax Department should file a claim in the liquidation proceedings. The Income Tax Department adjusted the refund under Section 245 of the Income Tax Act, 1961. The Assistant Director

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## Issues and analysis

### Issue 1: Whether the Income Tax Department can adjust the refund due to the Corporate Debtor against …

**Ratio:** The legal principle is that the Insolvency and Bankruptcy Code (IBC) overrides other

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**Reasoning:** The court reasoned that once a corporate debtor is undergoing liquidation, it falls under

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**Interpretation:** This issue involves the interpretation of Section 238 of the IBC, which

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**Application:** In this specific case, the Income Tax Department's action of adjusting the

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Vinod Kumar…
- **Respondents:** Nicco Corporation…; The Assessing…

## Timeline

- **2017-10-17 — Liquidation…**: Adjudicating Authority directed Nicco…
- **2020-05-08 — Income Tax Ref…**: Liquidator received an order stating that Rs.…

## 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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