CG Power faces ₹365-crore tax demand for AY18; to file appeal

Engineering company CG Power and Industrial Solutions Ltd on Wednesday (November 19) said it has received a final assessment order for assessment year 2018-19, raising tax demands of ₹365.37 crore.

The order was issued under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, and includes various additions and disallowances made by the Income Tax Department.

The disclosure follows the Bombay High Court's April 30, 2024, direction in an earlier matter, where the court instructed the Central Board of Direct Taxes to allow the company to file revised income tax returns for FY15 to FY20 based on recast accounts.

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The court had also instructed the assessing authority to accept those revised returns and complete assessments accordingly. CG Power had communicated this development through its May 8, 2024, disclosure.

According to the company, it is aggrieved by the latest assessment order and will be filing appeals challenging the additions and disallowances. It will also submit an application seeking rectification of mistakes apparent from the record.

CG Power stated that, based on substantial jurisprudence, rulings, and legal opinions, it believes it has a fair chance of succeeding in the appeal and expects the additions and disallowances to be deleted.

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The final assessment pertains solely to AY18 and does not alter the earlier directions issued by the Bombay High Court in connection with the revised returns.

Shares of CG Power and Industrial Solutions Ltd ended at ₹724.10, down by ₹9.35, or 1.27%, on the BSE today, November 19.