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Tata Steel received an income tax order on Friday which increases its FY 2019 taxable amount, pertaining to the merger of Bhushan Steel with the Tata Group company back in 2019. Bhushan Steel has been renamed as Tata Steel BSL Limited, the company stated.
In May 2018, Tata Steel had announced the acquisition of Bhushan Steel, through its wholly owned subsidiary Bamnipal Steel. After this acquisition, a debt of Rs 25,185.51 crore was waived off in favour of Tata Steel BSL Limited (TSBSL). From November 2021, TSBSL and Bamnipal Steel merged with Tata Steel.
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“On March 13, 2025, Tata Steel received a show-cause notice seeking further documents on the abovementioned waiver amount,” Tata Steel said in an exchange filing. The details were sought for the purpose of reassessment of taxable income for AY 2019-20. Tata Steel stated that the income tax return of Bhushan Steel for FY 2018-19 was accepted by the income tax department in June 2020 without any demand pertaining to the waiver of loan.
A few days later, on March 24, the Tata company filed a writ petition with Bombay High Court questioning the authority of the Assessing Officer in conducting the reassessment of taxable income for AY 2019-20. Further, Tata Steel on March 31 received an order, reassessing the taxable income for FY 2018-19 (AY 2019-20) and increasing the taxable amount for FY 2018-19 by the amount of debt waived (Rs 25,15 crore).
“The order further provides that the company is allowed to file necessary documents with the tax authorities for computation of final tax liability in this regard,” it added.
As things stand, Tata Steel has filed a writ petition before the Bombay High Court challenging technical infirmities in conducting the Income Tax reassessment proceedings. In addition to its petition, Tata Steel will also seek appropriate legal remedies contesting the matter on merit. “The company has examined the matter and believes that it has a strong case on merits apart from the technical infirmities in the Order for which the company is already before the Bombay High Court . The company believes that waiver of debt cannot be treated as taxable income in the hands of TSBSL at the relevant point in time,” the company stated.
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