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The income tax department is strengthening its representation in corporate insolvency cases being resolved through the Insolvency and Bankruptcy Code.
The Central Board of Direct Taxes (CBDT) has directed field officials to appoint Standing Counsel to the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) to ensure that the income tax department is fully represented in such cases.
It has also asked the Principal Chief Commissioners of Income Tax (PCCIT), in whose jurisdiction the NCLT Bench is situated, to obtain and regularly update records of pending income tax matters from the registry to ensure that the cases do not go unrepresented.
“Such details of pending cases obtained by the PCCIT where the Bench is situated shall be communicated to other PCCIT regions, covered by the said Bench to ensure representation,” it said in a recent missive.
This is the latest in a series of missives by CBDT to its officials to ensure proper representation of the department and strengthen recovery in such cases.
Earlier, the CBDT had found that it had not been made party in a dispute under the Hyderabad Bench of NCLT where a company was given relief under the Income Tax Act.
At that time, it had requested the Ministry of Corporate Affairs, NCLT and the Insolvency and Bankruptcy Board of India to notify it in such cases.
It had also asked assessing officers to notify the demands due from sick companies to the resolution professionals and insolvency professionals.
The CBDT had also directed field formations to request the NCLT to make the department a party in all cases where tax relief was proposed under the resolution plan.
Tax dues The income tax department has over ₹6.59 lakh crore of taxes raised but not realised by the end of 2015-16, of which pending corporate tax dues amounted to ₹3.43 lakh crore.
Industry experts said though the tax department is an operational creditor under the IBC, it is now working on them more actively.
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