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of <h1>Corporate Debtor Appeals Adjudicator's TDS Deposit Order, Tribunal Emphasizes Income Tax Authority Jurisdiction</h1> The Appeals were filed by the Corporate Debtor against orders of the Adjudicating Authority directing the deposit of unpaid TDS amounts deducted from ... Validity of directions issued by the NCLT after permitting the withdrawal of application - Direction to deposit the unpaid TDS amount, deducted from the employees, within the period of 15 days - HELD THAT:- The steps are being taken by the Income Tax Department for recovery of TDS amount. Present is a case where deposit of TDS amount deducted from the salary of the employees was not deposited by the Corporate Debtor inspite of specific clause entered into the Joint Settlement Agreement that the amount shall be deposited by the Appellant on or before 20.07.2021. The submission of the Counsel for the Appellant is that when Application under Section 9 was to be withdrawn by virtue of payment of all dues to employees under the Settlement Agreement, there was no occasion or jurisdiction of the Adjudicating Authority to issue direction to deposit TDS amount. While permitting withdrawal of Section 9 Application, the Adjudicating Authority could have passed an order taking into consideration the Settlement entered between the parties. Hence, direction to Appellant to deposit the deducted amount of TDS cannot be faulted. Company Appeals are disposed of upholding the direction of the Adjudicating Authority to the Appellant to deposit the TDS amount. We, however, set aside the period of 15 days as allowed by the Adjudicating Authority to the Appellant to deposit and we observe that the deposit shall be made by the Appellant during the period as provided by the Income Tax Authorities. Issues:1. Appeals against orders of Adjudicating Authority directing deposit of unpaid TDS amount.2. Validity of Adjudicating Authority's direction to deposit TDS amounts.3. Interpretation of Settlement Agreement terms regarding TDS payments.4. Jurisdiction of Adjudicating Authority in issuing deposit directives.5. Compliance with Income Tax Act provisions for TDS recovery.Issue 1: Appeals against Adjudicating Authority's OrdersThe Appeals were filed by the Corporate Debtor against orders of the Adjudicating Authority directing the deposit of unpaid TDS amounts deducted from employees' salaries within 15 days. The Appeals challenged the impugned directions issued by the Adjudicating Authority in various insolvency applications filed by ex-employees under Section 9.Issue 2: Validity of Deposit DirectiveThe Adjudicating Authority directed the Corporate Debtor to deposit the TDS amounts despite Settlement Agreements with ex-employees, where the Corporate Debtor agreed to make these payments directly to relevant authorities. The Corporate Debtor argued that the Income Tax Department should recover the TDS amounts independently, and there was no need for the Adjudicating Authority's directive.Issue 3: Interpretation of Settlement AgreementThe Settlement Agreements between the Corporate Debtor and ex-employees clearly outlined the obligation to pay TDS amounts directly to the authorities by specific dates. The Adjudicating Authority's direction conflicted with the terms of these agreements, raising questions about the necessity of additional directives for depositing TDS amounts.Issue 4: Jurisdiction of Adjudicating AuthorityThe Adjudicating Authority's jurisdiction in issuing directives for TDS deposit post-Settlement Agreement and withdrawal of Section 9 applications was debated. The Corporate Debtor contended that such directives were unnecessary after settling dues with ex-employees, while the Respondents argued that non-deposit of TDS affected tax benefits and required immediate action.Issue 5: Compliance with Income Tax ActThe Income Tax Department's actions for TDS recovery were highlighted, indicating steps taken for recovery post non-deposit by the Corporate Debtor. The Tribunal emphasized the Income Tax Authority's jurisdiction to recover dues, including TDS amounts, and the need for compliance with the Income Tax Act provisions.This detailed analysis of the judgment covers the key issues involved, including the Adjudicating Authority's directives, Settlement Agreement terms, jurisdictional aspects, and compliance with relevant legal provisions.
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