Income Tax Dept Seized Amount Adjusted Towards Demand Prior to Initiation Of CIRP Not an Asset of CD:

The NCLAT ruled that an amount seized by the Income Tax Department before the initiation of Corporate Insolvency Resolution Process (CIRP) cannot be considered an asset of the corporate debtor (CD). The case concerned the adjustment of a seized amount towards a tax demand, and whether such an amount could be included in the CD’s assets. The tribunal clarified that assets seized by the Income Tax Department before the commencement of CIRP do not belong to the corporate debtor. The decision upholds the position that assets seized prior to CIRP initiation are not part of the resolution process, reinforcing the legal framework surrounding asset treatment during insolvency.