CG Power and Industrial Solutions Ltd – Revisionary Tax Assessment (AY 2022‑23)
Overview
- Date of announcement: 21 April 2026
- Regulatory reference: SEBI Listing Regulation 30 disclosure
- Key event: Income Tax Department issued a revisionary assessment order under Section 263 of the Income Tax Act for Assessment Year 2022‑23.
Tax Litigation Details
| Item | Details |
|---|---|
| Opposing party | Income Tax Department, Ministry of Finance |
| Nature of dispute | Additional disallowance of unabsorbed depreciation loss of Rs 21,43,17,440 in the reassessment order dated 20 April 2026. |
| Original demand (FY 2024‑25) | Rs 188,78,91,580 (original assessment order dated 28 Feb 2024). |
| Total tax claim after revision | Rs 236,73,81,955 (≈ Rs 236.74 crore). |
| Current status | Appeal filed before the Commissioner of Income Tax (Appeals). Management believes the appeal has a fair chance of success. |
Financial Impact
- Potential liability: Up to Rs 236.74 crore (≈ $2.8 million USD) pending resolution.
- Cash flow implication: If the demand is upheld, the company would need to settle the amount, impacting liquidity and possibly earnings for FY 2026‑27.
- Provisioning: No explicit provision mentioned; likely to be disclosed in upcoming quarterly results.
Management Commentary
- The Company’s Company Secretary, Sanjay Kumar Chowdhary, affirmed that the matter is being evaluated and appropriate legal steps, including an appeal, are underway.
- Management expresses confidence in a favorable outcome, indicating that the disallowance may be deleted.
Investor Implications
- Risk: Uncertainty around the final tax liability could affect short‑term profitability and cash reserves.
- Opportunity: A successful appeal would eliminate the additional tax burden, potentially improving net margins.
- Monitoring: Track future SEBI disclosures, quarterly financial statements, and any court/tribunal orders.
Outlook
Given the sizable but contested tax claim, the outlook is moderately negative. The company’s proactive legal stance and confidence in overturning the addition temper the risk, but investors should remain vigilant until the appeal is resolved.