Bank of America just raised its EUR/USD forecast
MUMBAI - Tata Steel (NSE:TISC) Limited is currently engaged in a legal dispute with Indian tax authorities over the reassessment of taxable income for the fiscal year 2018-19. The contention arises from a debt waiver worth ₹25,185.51 crore granted to Tata Steel BSL Limited (formerly Bhushan Steel Limited) following its acquisition by Tata Steel’s wholly owned subsidiary, Bamnipal Steel Limited, in May 2018.
The company received a show cause notice on March 13, 2025, from the Deputy Commissioner of Income Tax, Mumbai, for further documentation related to the waiver, which was initially accepted by the income tax department in June 2020 without any demand. In response, Tata Steel filed a writ petition on March 24, 2025, with the Bombay High Court, challenging the authority of the tax officer’s reassessment for the Assessment Year (AY) 2019-20.
An Assessment Order issued on March 31, 2025, increased Tata Steel’s taxable income for the fiscal year 2018-19 by the amount of the debt waiver. The company is permitted to submit documents for final tax liability computation.
Tata Steel is disputing the reassessment on both technical and merit-based grounds. The company’s management believes that the debt waiver should not be considered taxable income, particularly since it was part of an acquisition process under the Insolvency and Bankruptcy Code (IBC). Tata Steel’s position is supported by past judicial precedents and relevant provisions of the Income Tax Act, 1961.
The financial implications of the reassessment are yet to be determined, as the company is allowed to provide further documentation to the tax authorities. Tata Steel intends to pursue all appropriate legal remedies, including contesting the merits of the Assessment Order and its technical aspects before the Bombay High Court and other relevant forums.
This disclosure, based on a press release statement, is made in compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The outcome of this legal matter remains pending as Tata Steel continues to review the impact of the Order and its next course of action.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.