Unremitted TDS Deducted Before Liquidation Does Not Form Part Of Liquidation Estate: NCLT Bengaluru

The National Company Law Tribunal (NCLT) Bengaluru bench of Shri Sunil Kumar Aggarwal, Member (Judicial) and Shri Radhakrishna Sreepada, Member (Technical) held that an unremitted Tax Deducted at Source (TDS) amounts deducted by the corporate debtor before the liquidation are assets held in trust for the government and therefore stand excluded from the liquidation estate under section 36 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal allowed the delayed claim filed by the government and directed the liquidator to verify and remit the amounts directly to the government.