Tata Steel has taken legal action against the Income Tax Department’s reassessment of its taxable income for FY 2018-19 (AY 2019-20).
The dispute arises from a ₹25,185.51 crore debt waiver linked to its acquisition of Bhushan Steel (now Tata Steel BSL Limited) through its subsidiary Bamnipal Steel Limited under the Insolvency and Bankruptcy Code (IBC).
The Assessing Officer had accepted Bhushan Steel’s tax return in June 2020 without objections. However, on March 13, 2025, Tata Steel received a show cause notice requesting further documentation on the waiver, leading to a reassessment order issued on March 31, 2025, which increased the company’s taxable income by the waived amount.
Tata Steel has challenged the reassessment, arguing that the waiver should not be taxed under the Income Tax Act, 1961, particularly since it was part of an IBC resolution.
The company filed a writ petition with the Bombay High Court on March 24, 2025, citing technical infirmities and past judicial precedents. It also plans to pursue further legal remedies before judicial and quasi-judicial forums.
Management is evaluating the reassessment’s impact and the next course of action. Tata Steel believes it has a strong case and remains confident in its legal position.
Source from: https://www.cnbctv18.com/market/tata-steel-share-price-challenges-income-tax-reassessment-on-debt-waiver-19584821.htm
