Tata Steel Receives Income Tax Order on Bhushan Steel Purchase
In accordance with the insolvency rules, Tata Steel has been issued an income tax order regarding the debt waiver associated with the purchase of Bhushan Steel. In May 2018, under the Insolvency and Bankruptcy Code (IBC), Tata Steel bought Bhushan Steel (later renamed Tata Steel BSL Limited) through its wholly-owned subsidiary, Bamnipal Steel.
Following the acquisition, a debt of Rs.25,185.51 crore was waived off in favor of Tata Steel BSL (TSBSL).
Tata Steel BSL and Bamnipal Steel were merged with Tata Steel with effect from November 2021.
According to a filing on Friday's stock exchange, on March 13, 2025, the assessing officer of the Office of the Deputy Commissioner of Income Tax, Circle 2(3)(1), Mumbai, sent a show cause notice to Tata Steel, requesting additional documents on the waiver amount.
Tata Steel reported that in June 2020, the income tax department accepted Bhushan Steel's FY19 income tax return without making any demands about loan waivers.
This year the steelmaker challenged the assessing officer's jurisdiction to review taxable income for AY 2019–20 in a writ suit filed with the Bombay High Court.
The order further stipulates that the business may submit the required paperwork to the tax authorities in order to calculate its ultimate tax due in this respect, the filing stated.
Tata Steel is said to be contesting technical errors in the reassessment process through a writ case that has already been filed in the Bombay High Court.
The company stated that it will also look for suitable legal remedies in the appropriate judicial and quasi-judicial channels.
Also Read: How Razorpay's Co-Founders Are Running a Fintech Revolution
It plans to challenge the contents of the assessing officer's order and contest the matter on its merits.
Aside from the "technical infirmities" in the order, which it is already arguing before the Bombay High Court, it feels that it has a compelling case on its own merits.