# In the matter of RRC International Freight Services Limited

> NCLT judgment dated 2024-02-22. Citation: TCN-2024-NCLT-02485. The case involves an application (IA No. 1001/2022) filed in connection with a Corporate…

- **Court:** NCLT
- **Order date:** 22 Feb 2024
- **Citation:** TCN-2024-NCLT-02485
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rrc-international-freight-services-limited-dd475347

## Summary

### Background

The case involves an application (IA No. 1001/2022) filed in connection with a Corporate Insolvency Resolution Process (CIRP) against RRC International Freight Services Limited. The CIRP commenced on 26.12.2018, and a liquidation order was passed on 22.10.2019. During the liquidation, the Income Tax Authorities issued notices under Section 142(1) of the Income Tax Act, which culminated in an assessment order dated 10.03.2021. Subsequently, proceedings under Section 270A and 270AAC were initiated, leading to penalty orders dated 07.12.2021 and 14.01.2022. The liquidator filed the application seeking to restrain the Income Tax Department from enforcing these orders.

## Facts

The Corporate Insolvency Resolution Process (CIRP) against RRC International Freight Services Limited commenced on December 26, 2018. Subsequently, a liquidation order was issued on October 22, 2019, under Section 33 of the Insolvency and Bankruptcy Code (IBC). During the liquidation process, the Income Tax Authorities issued notices to the corporate debtor under Section 142(1) of the Income Tax Act on July 27, 2020, December 11, 2020, and January 13, 2021. These notices resulted in an assessment order dated March 10, 2021, assessing the corporate debtor's total income at Rs. 3,44,86,678. Further proceedings under Sections 270A and 270AAC of the Income Tax Act were initiated, leading to show cause notices dated March 10, 2021, June 10, 2021, and December 27, 2021,

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## Issues and analysis

### Issue 1: Whether the orders dated 07.12.2021 and 14.01.2022 issued by the Income Tax Authorities can be …

**Ratio:** The legal principle is that a moratorium is in place during the CIRP and liquidation

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**Reasoning:** The court reasoned that the orders dated 07.12.2021 and 14.01.2022 cannot be executed

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**Interpretation:** The interpretation is that the moratorium under the IBC aims to protect the

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**Application:** The court applied this principle to the specific facts, restraining the Income

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## Parties

- **Judges:** ANIL RAJ C…; Kuldip Kumar…
- **Appellants:** Ashish…
- **Respondents:** RRC International…; Additional/Joint/D…

## Timeline

- **2018-12-26 — CIRP Commen…**: Corporate Insolvency Resolution Process (CIRP) commenced against RRC International…
- **2019-10-22 — Liquidation…**: Liquidation order was passed under Section 33 of…

## 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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