Varun Anil Chopra Vs Income Tax Department (NCLT Ahmedabad)
Summary: NCLT Ahmedabad held that the Income Tax Department could not adjust an income-tax refund crystallised after commencement of CIRP against pre-CIRP tax dues while the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 was in force. Demac Technologies Private Limited entered CIRP on 20.01.2026. Thereafter, its return for AY 2025-26 was processed and a refund of ₹56,07,920 was determined on 12.02.2026. The Income Tax Department invoked Section 245 of the Income-tax Act, 1961 and adjusted ₹35,11,100 towards the pre-CIRP tax demand and ₹6,53,628 towards interest under Section 220(2), aggregating to ₹41,64,728.
The Tribunal held that once determined after commencement of CIRP, the refund constituted an enforceable receivable/asset of the Corporate Debtor forming part of the pool available for CIRP. It distinguished determination of statutory liability from recovery or appropriation of assets: while the tax authority could determine statutory dues and lodge its claim in CIRP, recovery had to conform to the IBC.
Section 245 could not confer an overriding right inconsistent with the moratorium because Section 238 gives the IBC overriding effect. The Tribunal also held that even an alleged no-objection or consent given by the IRP could not waive a mandatory statutory moratorium. The adjustment was therefore set aside and the Department was directed to reverse it and release ₹41,64,728 to the Corporate Debtor’s designated account within two weeks. Statutory interest under Section 244A was allowed, if otherwise admissible, subject to determination by the competent Income-tax authority. The Tribunal expressly left the validity and quantum of the underlying tax demand undecided.
