Tata Steel Challenges Tax Reassessment Order Of Over Rs 25,000 Crore In Bombay HC
Tata Steel approached the Bombay High Court against an income tax reassessment order that sought to increase its taxable income for the financial year 2018-19 by more than Rs 25,000 crore. Issuing an official filing with the exchange on Friday, the steel major confirmed receiving a fresh assessment order dated March 31, 2025.
The reassessment stemmed from a waiver of debt linked to the acquisition of Bhushan Steel, now known as Tata Steel BSL Limited, during that fiscal year, reported PTI.
This followed a show cause notice from the Mumbai-based Office of the Deputy Commissioner of Income Tax (Circle 2(3)(1)) issued earlier on March 13. The notice requested additional documentation regarding the waiver of Rs 25,185.51 crore granted during FY19 as part of the acquisition process.
Bhushan Steel Waiver Under Scrutiny
Tata Steel acquired the debt-ridden Bhushan Steel Limited in May 2018 via proceedings under the Insolvency and Bankruptcy Code (IBC). As part of the resolution plan, a loan amounting to Rs 25,185.51 crore was waived in favour of Tata Steel BSL Limited (TSBSL). Subsequently, in November 2021, both TSBSL and Bamnipal Steel Limited were amalgamated into Tata Steel Limited, with the appointed date for the merger fixed at April 1, 2019.
Tata Steel underlined that Bhushan Steel’s income tax return for FY19 was already accepted by the tax department in June 2020, with no demands related to the loan waiver at that time. “It is pertinent to note 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,” the company said in the statement.
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Company Asserts Legal And Technical Grounds
On March 24, prior to the issuance of the assessment order, Tata Steel filed a writ petition in the Bombay High Court. The company challenged what it termed as “technical infirmities” in the reassessment proceedings. It maintained that the waiver of debt during an acquisition under IBC cannot be treated as taxable income for TSBSL during that period.
“Tata Steel 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 High Court of Bombay,” the filing stated.
In addition to the ongoing High Court case, the company planned to pursue other legal options through appropriate forums. “It will also seek appropriate legal remedies before relevant judicial/quasi-judicial forums contesting the matter on merits and challenging the contents of the order passed by the Assessing Officer,” the company added.
According to Tata Steel, the relevant sections of the Income Tax Act, 1961 do not allow for such a waiver—especially one resulting from an IBC-driven resolution—to be considered taxable income.
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