The Insolvency and Bankruptcy Board of India (IBBI) has eased some Compliances burden. It has clarified that insolvency professionals would not be required to obtain any non-objection or no dues certificate from the Income Tax Department during the voluntary liquidation process.
IBBI has noticed that liquidators had been seeking these certificates even though the Code or the Regulations did not ask for such a requirement.
“The process of applying and obtaining of such NOC/NDC from the Income Tax Department consumes substantial time and thus militates against the express provisions of the Code, and also defeats the objective of time-bound completion of process under the Code,” IBBI said.
However, Regulation 14 of the IBBI voluntary liquidation process mandates the liquidator to make the public announcement within five days of his appointment, calling for submission of claims by stakeholders within thirty days from the liquidation commencement date.
It also obligates all the financial creditors, operational creditors including government, and other stakeholders to submit their claims within the specified period. If the claims are not submitted in time, the corporate entity may get dissolved without dealing with such claims.