CG Power Faces Income Tax Directive

CG Power and Industrial Solutions Limited, also referred to as Crompton Greaves Limited, is an Indian multinational enterprise involved in the design, manufacture, and marketing of products pertinent to power generation, transmission, distribution, and rail transportation.

CG Power under Investigation by the Income Tax Department  

With regard to the earlier announcements made by the Company regarding the demand order received from the Income Tax Department for the Assessment Year 2022-23, totalling ₹1,88,78,91,580, we would like to inform you that the Company has now obtained an order from the Income Tax Department related to this issue, subsequent to an application filed by the Company. This is in accordance with the stipulations set forth under Regulation 30 of the Listing Regulations, dated 13th July 2023.

Notice Details from the Income Tax Department  

In response to the assessment order, the Company filed an appeal before the Commissioner of Income Tax (Appeals) [“CIT(A)”], NFAC, on March 26, 2024, contesting the additions and disallowances made in the demand.

Subsequently, the Company submitted a stay application to the Assessing Officer on May 2, 2024. The order instructed the Company to deposit ₹4,89,38,029/- as part of the demand, while staying the balance amount until the final resolution of the appeal before the CIT(A).

Issues with CG Power’s tax filings

The Income Tax Department’s investigation into CG Power seems to centre on suspected irregularities in the company’s tax returns, such as underreporting income, inconsistencies in financial records, and possible mismanagement of tax deductions. Should these concerns result in reassessments, CG Power may be subjected to significant penalties and interest on outstanding taxes, which could further strain its financial condition.

Share Price Update for CG Power and Industrial Solutions Ltd.

The share price of CG Power and Industrial Solutions Ltd. has risen by 1% and is currently trading at ₹776.55 per share as of 2:02 pm on the NSE. The share 52 week’s high trading price is ₹874.70.

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