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2022 (10) TMI 697 - NATIONAL COMPANY LAW TRIBUNAL , CHANDIGARH BENCHCIRP - Validity of penalty proceedings under the Income Tax Act - Prayer for declaring the actions of the respondent as Contrary to I&B Code - staying the Assessment Order of A.Y. 2018-19 year dated 13.05.2021 and notice under Section 274 read with Section 271 AAC(1) of the Income Tax Act, 1961 dated 13.05.2021 for A.Y. 2018-19 - Section 60(5)(c) of the IBC, 2016 - HELD THAT:- In the present case at hand, the Corporate Debtor was ordered to be liquidated by order dated 08.08.2018 and the Income Tax Department passed the assessment order on 13.05.2020 and issued a show cause notice on 29.09.2021. It is also seen that the respondent has filed the claim, and it was admitted to the tune of Rs. 7,36,59,888/-. The issue for our consideration is whether the Income Tax Department’s action of initiating proceedings under the Income Tax Act and raising demands after the initiation of liquidation is in conformity with the provisions of IBC, 2016 - In the present case, the assessment proceeding for assessment year 2018-19 and the penalty proceedings in assessment year 2018-19 and 2019-20 have been initiated after the order for liquidation. The Assessment Order of A.Y. 2018-19 year dated 13.05.2021 and notice under Section 274 read with Section 271 AAC(1) of the Income Tax Act, 1961 dated 13.05.2021 for A.Y. 2018-19 and the show cause notice under Section 274 read with Section 270A of Income Tax Act, 1961 dated 29.09.2021 for A.Y. 2019-20 and notice under Section 274 read with Section 271 AAC(1) of the Income Tax Act, 1961 dated 29.09.2021 for A.Y. 2019-20 have been initiated in the teeth of provisions of Section 33(5) of IBC and hence is violative of the Code - Application allowed. Claim for fee for the tenure he served as Liquidator - direction to Liquidator/respondent to accept the claim of the applicant for the services provided by him as Liquidator for the period 08.08.2018 to 31.10.2019 - direction to present Liquidator not to claim any fee pursuant to the sale of Corporate Debtor’s assets before proper adjudication - HELD THAT:- No case has been made out by the Ex-Liquidator in the present case regarding any realization or distribution beyond the sale of one asset i.e. Toyota Car, and released an amount of Rs.2,60,000/-. In view of the fact that very high amount of liquidation cost are claimed giving the period under consideration, the realization net of other liquidation cost will be in the negative. Admittedly, no amount were distributed during the said period to the stakeholders. Thus, as per Regulation 4(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulation, 2016, no fee is held to be due to the applicant - the prayer of the applicant is rejected and the present application is dismissed. Direction to Ex-Liquidator to release the payment which is related to the professional services provided by the present applicant to the Corporate Debtor during the Liquidation period - Section 60(5) of the IBC, 2016 - HELD THAT:- In the present case, no written contract with the applicant-auditor for the performance of the work has been placed on record during the present proceedings. The financial creditor i.e. State Bank of India has also filed an application praying for directions to conduct the audit of the CIRP cost incurred by the erstwhile Liquidator which are stated to be abnormally high. Needless to say, such type of allegations would not have arisen if the Auditor had done his job diligently - the claim of the applicant for his professional fees fails and the present application is dismissed and disposed of accordingly. Direction to respondents to appoint a competent person to get the CIRP costs audit conducted of the corporate debtor for the period 29.09.2017 to 31.10.2019 - Section 60(5) of the IBC, 2016 and read with Rule 11 of the NCLT Rules - HELD THAT:- There is a need to audit the Books of Accounts of the Corporate Debtor to ascertain the actual position. Furthermore, the reasons extended by erstwhile Liquidator for non production of books for the financial year ending on 31.03.2018 do not appear credible. In view of the above discussions, we allow the prayer for audit of books of accounts of the corporate debtor. The liquidator is directed to appoint an independent Auditor for the purpose of audits of books of account and to ascertain the actual CIRP cost and the expenses incurred in the audit shall be included in the liquidation cost of the corporate debtor - This Adjudicating Authority further directs that the liquidator should also make all efforts simultaneously to retrieve the required information from the computerized data of the corporate debtor from the systems handed over to him after taking charge of the corporate debtor. Application allowed.
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