Piramal Enterprises Ltd.'s subsidiary—Piramal Capital & Housing Finance Ltd.—plans to contest a Rs 466.30 crore tax penalty imposed by the Income Tax Department. The penalty is linked to PCHFL's acquisition of Dewan Housing Finance Corporation Ltd. in 2020.
The penalty relates to PCHFL's voluntarily withdrawn claim of Rs 3,698 crore, which was made before the start of tax assessment proceedings. PCHFL argued that the penalty is not justified, according to its statement to the exchanges.
The dispute followed an income tax assessment order for the financial year 2021-22, which allowed PCHFL to carry forward a loss of Rs 10,627 crore. The loss resulted from bad advances made by DHFL prior to its acquisition by Piramal Group.
In simpler terms, PCHFL is contesting the penalty imposed for withdrawing a claim related to its DHFL acquisition. The company maintains that it should not be penalised for an action taken before the assessment began. While the dispute is significant, PCHFL expects no impact on its financial statements.
PCHFL received the tax order on Aug. 23 and a rectification email on Aug. 26. The company said it will take the necessary steps to contest the penalty and anticipates a favourable outcome.
Shares of Piramal Enterprises ended 0.6% higher at Rs 1,058.40. That compared with 0.75% gains in the country's benchmark BSE Sensex.
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