Crashes, No Sound, or Screen Glitches?
Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minutePC Slower Than It Used to Be?
A free scan shows the junk files, broken settings and background clutter dragging Windows down - then fixes them in one click.Free scan · Windows 10 & 11If the Income Tax Department has adjusted a company’s refund against a tax demand during a Corporate Insolvency Resolution Process (CIRP), preserve the Section 245 notice and portal records, then have the resolution professional (RP) and insolvency counsel compare the demand and adjustment dates with the CIRP moratorium, the department’s insolvency claim, and any approved resolution plan. The adjustment is not automatically invalid in every situation: the process stage, when the refund was determined, and how the tax claim was treated can change the analysis. If the refund calculation or tax credit is wrong, pursue that tax issue separately.
What does Section 245 allow, and what does it not decide?
Section 245(1) of the Income-tax Act, 1961 permits an authorized officer to set off a refund against a sum that remains payable under the Act, after giving the taxpayer written intimation of the proposed action. The Income Tax Department’s official text identifies this as the wording substituted by the Finance Act, 2023, effective 1 April 2023. Section 245(2) separately permits withholding a refund in specified circumstances while assessment or reassessment proceedings are pending, subject to the statutory conditions, recorded reasons, and prior approval. Read Section 245.
As an Amazon Associate I earn from qualifying purchases.
That tax-law power does not by itself answer whether a particular set-off is prohibited recovery during a CIRP moratorium or bypasses the Insolvency and Bankruptcy Code (IBC) claims process. Tribunals have considered the interaction between the two laws in specific cases; the company’s dates and insolvency record matter.
Section 238(2) of the Income-tax Act addresses who may claim or receive a refund when the taxpayer cannot do so because of matters such as insolvency or liquidation. It allows the applicable legal representative, trustee, guardian, or receiver to act for the person or estate. It does not independently resolve whether the department may set off a refund against a demand during CIRP. Read Section 238.
#1 Best Overall
Why does the company’s insolvency stage matter?
A CIRP moratorium, the period after a resolution plan is approved, and liquidation are distinct situations. The cited decisions do not establish one rule that can be applied to every stage or every refund. Use the stage as a starting point, then test the dates, claim treatment, notice, and relief sought against the company’s actual record.
| Stage | What to examine | What the cited decisions establish |
|---|---|---|
| Live CIRP and moratorium | Whether the demand is a pre-CIRP claim and whether the adjustment recovers it from company assets outside the collective process. Check the demand, refund determination, notice, and actual adjustment dates. | NCLT decisions have directed reversal in particular moratorium cases; they do not make every adjustment automatically void. |
| After approval of a resolution plan | Read the approved plan and its treatment of the department’s claim, and identify when the refund became payable and when the set-off occurred. | The cited materials do not establish a general outcome for every post-approval adjustment. The plan and full chronology are central. |
| Liquidation | Compare the set-off with the department’s entitlement as a liquidation claimant and the liquidator’s account of the estate. | NCLAT remanded a liquidation dispute for a determination of whether the tax refunds set off exceeded the department’s entitlement; it did not apply a blanket CIRP-moratorium rule. |
The date of the assessment year alone does not establish when a refund asset crystallized. Check the return-processing or other refund-determination record and the actual date the amount became payable, alongside the demand and CIRP dates.
Rank #2
- Quick reference learning guide
- Definitions and glossary of terms
- Tax tips, and everything else you need to know about filing
- Common mistakes, understand audits
- Claiming a dependant and more
Which records should the RP assemble?
Keep the records together and build a single chronology before deciding whether to challenge the adjustment. The chronology should distinguish a proposed set-off from one already completed.
- Establish the insolvency stage. Obtain the NCLT admission order, record the CIRP commencement date, and confirm whether the company remains in CIRP, has an approved resolution plan, or is in liquidation.
- Capture the adjustment trail. Download the Section 245 written intimation and relevant tax-portal records. Record the cited assessment years and demands, amount, date, and whether the notice proposes an adjustment or confirms one already made.
- Verify the refund and credit. Gather the return, Section 143(1) processing record or other refund-determination record, refund computation, bank-credit record, and tax-credit ledger.
- Trace the demand and any challenge. Collect assessment and demand records, recovery orders, appeals, and applications for or orders granting a stay. Note whether the demand is disputed, stayed, contingent, or accepted.
- Check the insolvency claim and plan. Find out whether the department submitted a claim, how the RP treated it, and what an approved resolution plan says about it. Record the plan-approval date, if applicable.
- Record every relevant event. Put the demand, CIRP commencement, claim submission and verification, refund determination, Section 245 intimation, actual adjustment, and plan approval or liquidation order in date order.
How have tribunals treated refund adjustments?
The orders show why a company should focus on the process stage and its own record rather than assume that a tax set-off always prevails—or always fails.
NCLT Mumbai: earlier demands set off against later refunds
In I.A. 1424 of 2020 in C.P.(IB) No. 1385/MB/2017, NCLT Mumbai Bench-I considered adjustments of available refunds against earlier Income Tax Department demands. The order stated: “Section 238 of the Code overrides other laws, accordingly the power of set off available u/s 245 of the Income Tax Act, 1961 is circumscribed by the provisions of the Code.” In the circumstances before it, the tribunal held that the department could not enforce the earlier demands against the later refunds. It ordered a refund of ₹1,41,41,86,628 with Section 244A interest. On a tax-credit difference, it directed a memo of differences so that the applicant could pursue a Section 154 application. These were case-specific directions, not a guaranteed remedy for another company. Read the NCLT Mumbai order.
NCLT moratorium order: adjustment during CIRP
A separate NCLT order describes ₹39,39,540 adjusted against pre-CIRP tax demands during a moratorium. It records a CIRP start date of 13 March 2019, cites IBC Sections 14 and 18(f), and directs the department to refund the amount to the RP within four weeks. The amount and direction relate to that case; they are not a general benchmark. Read the NCLT order.
NCLT Ahmedabad: reported 2026 moratorium decision
A LiveLaw Business report dated 14 September 2026 describes Varun Anil Chopra v. Income Tax Department, IA/952(AHM)2026 in C.P.(IB)/409(AHM)2025. According to the report, CIRP began on 20 January 2026, a ₹56.07 lakh refund was determined on 12 February 2026, and the department adjusted ₹41.64 lakh against pre-CIRP demand and interest, leaving ₹14.43 lakh. The report says the tribunal set aside the adjustment and directed reversal to the corporate debtor’s designated account under the RP’s control within two weeks. It also reports that the tribunal did not decide the validity or quantum of the underlying demand, distinguished determination of liability from recovery, rejected alleged IRP consent as a waiver of the moratorium, and left any Section 244A interest to the competent tax authority. This summary is based on secondary reporting; consult the linked report and full order before relying on the precise reasoning. Read the LiveLaw Business report.
Free tools Windows power users keep installed
One-click scans. No signup required.
NCLAT: liquidation is a separate question
In Avil Menezes v. Principal Chief Commissioner of Income Tax, Company Appeal (AT) (Insolvency) No. 258 of 2024, decided 12 July 2024, NCLAT addressed set-off during liquidation. It remanded the matter for the adjudicating authority to decide whether the refunds set off exceeded the department’s entitlement as a liquidation claimant. That approach cautions against transferring a rule from a live-CIRP moratorium dispute wholesale to liquidation. Read the NCLAT order.
Best Value
What should the company do about the adjustment?
Once the records are assembled, the RP and insolvency counsel can assess whether the set-off functions as recovery of a pre-CIRP liability during the moratorium or otherwise conflicts with the claims process. They should compare the department’s filed and verified claim, any appeal or stay, the refund’s determination date, the adjustment date, and—if approved—the resolution plan’s terms.
- If the adjustment is proposed: preserve the written Section 245 intimation and have the company’s tax and insolvency advisers assess the response before the proposed action is completed.
- If the adjustment has happened during a live moratorium: where the facts resemble the cited moratorium cases, the RP may consider seeking directions from the NCLT. Whether relief is available depends on the full record and applicable law.
- If the company is in liquidation or a plan has been approved: assess the adjustment under that stage’s rules and the applicable plan or liquidation claim treatment, rather than assuming the live-CIRP result controls.
- If the tax credit or refund computation is wrong: investigate the available tax correction or appeal procedure independently of the insolvency objection. In the Mumbai matter, the tribunal directed a memo of differences for a possible Section 154 application; that direction does not determine the right procedure or result in another case.
Do not assume interest follows automatically from a successful objection. The Mumbai order directed Section 244A interest on the amount ordered refunded, while the September 2026 Ahmedabad report says any such interest was for the competent tax authority to determine. Entitlement must be assessed under the applicable order and tax law.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
Do these 3 things before closing this tab:
1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errors
