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New Delhi: The government on Wednesday amended the Income Tax Rules to allow resolution professionals appointed by the National Company Law Tribunal (NCLT) to verify the tax returns of companies undergoing bankruptcy.
The Income-tax (24th Amendment) Rules, 2021 notified by the tax department also made it the obligation of the resolution professional to follow the rules meant for tax return preparers of certain assessees. Authorised representatives who prepare tax returns for assessees are required to furnish details of the documents given by the assessee for preparation of the return as well as details of the scope and findings of any examination the representative has done on such documents.
The new rules authorise the resolution professional to furnish this information in the case of a company undergoing bankruptcy proceedings, showed the rule amendment.
The idea is to align the two laws and make sure there is no gap in the regulatory process. The amendment is expected to help the insolvency resolution process by clarifying the role of the resolution professional under the Income Tax Act. The government is keen to avoid delays in the insolvency resolution process as many cases have overshot the 180 day period stipulated in the Insolvency and Bankruptcy Code (IBC) to finalise a resolution plan.
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