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NOC not required from the Income Tax Department, during Voluntary Liquidation process under IBC

Pratice Area

The Insolvency and Bankruptcy Board of India (IBBI), vide its Circular No. IBBI/LIQ/45/2021 dated November 15, 2021, issued a clarification regarding the requirement of seeking No Objection Certificate (NOC) / No Dues Certificate (NDC) from the Income Tax department, during Voluntary Liquidation Process under the Insolvency and Bankruptcy Code, 2016 (IBC). Acknowledging the substantial time consumed in the process of applying and obtaining of such NOC/NDC from the Income Tax Department (which defeats the objective of time-bound completion of process under IBC) as well as relying on the provisions of IBC, the Regulations made thereunder read with Section 178 of the Income Tax Act, 1961, IBBI clarified that an Insolvency Professional handling voluntary liquidation process is not required to seek any NOC/NDC from the Income Tax Department as part of compliance in the said process.