Hindustan Zinc, a leading mining company in India, disclosed on July 30 that it has received a significant tax demand notice from the Income Tax Department. The notice, amounting to Rs 1,170 crore, includes interest and pertains to the assessment year 2020-21. The company shared this information through an exchange filing.
This tax demand is based on similar disallowances and additions that were imposed in previous years. Hindustan Zinc has pointed out that it has received favorable rulings on these issues from the Income Tax Appellate Tribunal in the past. This history gives the company confidence that it will achieve a similar outcome this time.
In response to the notice, Hindustan Zinc announced that it will file an appeal and a stay application with the Income Tax Appellate Tribunal. The company is optimistic about the appeal process and does not foresee any substantial financial impact from the current assessment order.
KEY POINTS
- Hindustan Zinc got a tax demand notice for Rs 1,170 crore for the year 2020-21.
- This demand is similar to past issues, which the company successfully challenged before.
- They plan to appeal and seek a stay from the Income Tax Appellate Tribunal.
- The company believes this will not significantly affect its finances.
- After this news, their stock price increased by 1.07%, closing at Rs 640.5 on the NSE.
Company’s Confidence in Positive Resolution
On July 30, Hindustan Zinc announced they had received a hefty tax demand notice amounting to Rs 1,170 crore from the Income Tax Department. This notice covers the assessment year 2020-21 and includes interest. The company, a subsidiary of Vedanta, made this information public through an official exchange filing.
The tax demand is based on disallowances and additions similar to those imposed in previous years. Hindustan Zinc has previously contested these issues and received favorable rulings from the Income Tax Appellate Tribunal. Drawing from this experience, the company is optimistic about achieving a positive outcome this time as well.
In response to the notice, Hindustan Zinc plans to file an appeal and a stay application with the Income Tax Appellate Tribunal. They believe that there will be no significant financial impact due to their history of successfully contesting similar demands.
Despite the tax notice, the company’s stock performed well. On the day of the announcement, Hindustan Zinc’s stock price increased by 1.07%, closing at Rs 640.5 on the NSE.
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Background and Previous Issues
Hindustan Zinc, a subsidiary of Vedanta, has faced similar tax demands in the past. The company has successfully contested these demands, receiving favorable rulings from the Income Tax Appellate Tribunal. This background provides a context for the company’s current strategy and response to the latest tax notice.
In addition to the Rs 1,170 crore notice for the assessment year 2020-21, Hindustan Zinc also received a notice for Rs 1,884 crore for the assessment year 2013-14.
The National Faceless Assessment Centre (NFAC) attributed this demand to clerical and arithmetical errors, as it did not consider pre-paid taxes.
The tax demand notice from the Income Tax Department is a significant development for Hindustan Zinc. The company received a notice of Rs 1,170 crore, including interest, for the assessment year 2020-21. This demand is based on identical disallowances and additions that were imposed in previous years.
These issues have been previously contested by the company, resulting in favorable rulings from the Income Tax Appellate Tribunal.
Hindustan Zinc’s strategy to file an appeal and a stay application with the Income Tax Appellate Tribunal reflects its confidence in a positive resolution.
The company’s statement highlighted that it does not anticipate any material financial impact from the current assessment order. This optimism is rooted in the company’s successful history of contesting similar tax demands.
The company’s stock performance on the day of the announcement indicates investor confidence in Hindustan Zinc’s ability to manage this issue. The stock price increased by 1.07 percent, closing at Rs 640.5 on the NSE.
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People May Ask
What is the amount of the tax demand notice received by Hindustan Zinc?
Hindustan Zinc received a tax demand notice of Rs 1,170 crore, including interest, from the Income Tax Department for the assessment year 2020-21.
Why is Hindustan Zinc confident about a positive resolution?
Hindustan Zinc has previously contested similar tax demands and received favorable rulings from the Income Tax Appellate Tribunal, which gives them confidence in a positive outcome.
How did the stock market react to the tax demand notice news?
After the announcement, Hindustan Zinc’s stock price increased by 1.07 percent, closing at Rs 640.5 on the NSE.
What steps is Hindustan Zinc taking in response to the tax notice?
The company will file an appeal and a corresponding stay application with the Income Tax Appellate Tribunal against the assessment order.
Has Hindustan Zinc faced similar tax demands in the past?
Yes, Hindustan Zinc has faced similar tax demands in the past and has successfully contested them, receiving favorable rulings from the Income Tax Appellate Tribunal.
