Tata Steel Receives Tax Notice of Over Rs 25,000 Crore, Moves to Bombay HC for Reassessment:

Tata Steel Receives Tax Notice of Over Rs 25,000 Crore, Moves to Bombay HC for Reassessment On Friday, Tata Steel received a tax notice to reassess its taxable income for the financial year 2018-19. The tax authority wants to increase the taxable amount by over Rs 25,000 crore. In response, Tata Steel has approached the Bombay High Court to challenge this reassessment. The company said it received the reassessment order on March 31, 2025, after getting a show-cause notice released on March 13, 2025, by the Assessing Officer, Office of the Deputy Commissioner of Income Tax, Circle 2(3)(1), Mumbai. The notice from March 13, 2025, asked Tata Steel to provide more documents about the waiver of Rs 25,185.51 crore in the financial year 2018-19 so that the tax authorities could reassess the company's taxable income for the year 2019-20. On March 24, Tata Steel filed a petition in the Bombay High Court, questioning problems in the way the reassessment process was being carried out. The company explained that it took over the previous Bhushan Steel Limited (now called Tata Steel BSL Limited) in May 2018 as part of the insolvency process. As a result of this takeover, a debt of Rs 25,185.51 crore was forgiven for Tata Steel BSL Limited (TSBSL). After some period, TSBSL and Bamnipal Steel Limited merged into and with Tata Steel Limited on November 2021. However, it was officially recognized in April 2019. Tata Steel, in a statement, said that the Income tax department accepted the income tax return of Bhushan Steel for FY 2018-19 in June 2020 without any demand associated with the waiver of debt. The company has looked into the issue and believes it has a strong argument in its favor. They also think there are technical mistakes in the order, and to address these, the company has already approached the Bombay High Court. The company mentioned that, along with the writ petition, it will also take legal action in the appropriate courts or legal bodies. They plan to challenge the decision made by the Assessing Officer by arguing the case based on its merits and questioning the details of the order. The company has said that based on the rules of the Income Tax Act of 1961, the debt that was forgiven should not be considered as income that TSBSL has to pay taxes on. This is especially true since the debt waiver happened as a result of an acquisition during the insolvency process, which is handled under the Insolvency and Bankruptcy Code (IBC).