CG Power & Industrial Solutions has received a substantial tax demand of ₹3.65 billion from the Income Tax Department for the assessment year 2018-19, corresponding to the financial year 2017-18. This development comes as part of the ongoing reassessment of the company's financials following a court order.

Tax Demand Details

The company disclosed the receipt of the final assessment order on November 19, 2025, which includes various disallowances and additions, resulting in the significant tax demand. The details of the assessment are as follows:

Company's Response

CG Power has stated that it is aggrieved by the order and is taking steps to file appeals against the additions and disallowances made by the tax authorities. The company believes it has a strong case based on substantial jurisprudence, rulings, and legal opinions, and expects a fair chance of succeeding in the appeal process.

Background

This tax demand is part of a larger reassessment process initiated following an order by the Bombay High Court on April 30, 2024. The court had directed the Central Board of Direct Taxes (CBDT) to allow CG Power to file revised income tax returns based on recast accounts for the financial years 2014-15 to 2019-20.

Potential Impact

The substantial tax demand may affect the company's financial obligations and could potentially impact its cash flow and financial planning. However, the final financial implications will depend on the outcome of the appeal process that the company intends to pursue.

Investor Considerations

Investors and stakeholders should note that this tax demand is subject to the appeals process, and the final liability may differ from the current demand. The company's ability to navigate this tax issue successfully will be crucial for its financial stability and future performance.

CG Power's management will likely provide further updates as the appeal process progresses. Investors are advised to monitor the company's future disclosures for more information on this matter and its potential impact on the company's financials.

CG Power & Industrial Solutions , a prominent player in the power and industrial equipment sector, has recently received a significant tax assessment order from the Income Tax Department. The company now faces a tax demand of Rs 33.02 crore for the Assessment Year 2020-21, stemming from various disallowances and additions made by the tax authorities.

Key Details of the Tax Assessment

Company's Stance and Future Actions

CG Power has stated its intention to challenge the assessment order by filing appeals against the additions and disallowances. The company expressed confidence in its position, citing that based on legal precedents and opinions, it believes it has a fair chance of succeeding in the appeal process.

Context of the Assessment

This tax demand comes in the wake of a previous court order by the Bombay High Court. The court had directed the Central Board of Direct Taxes (CBDT) to allow CG Power to file revised income tax returns based on recast accounts for the financial years 2014-15 to 2019-20. The current assessment for AY 2020-21 appears to be part of this ongoing process of reassessment and financial reconciliation.

Potential Impact and Outlook

While the tax demand of Rs 33.02 crore is substantial, CG Power's decision to appeal suggests the company is prepared to engage in a potentially lengthy legal process to contest the assessment. The outcome of this appeal could have significant implications for the company's financial statements and tax liabilities.

Investors and stakeholders will likely be watching closely to see how this tax issue unfolds, as it could impact the company's financial position and future earnings reports. However, it's important to note that such tax disputes are not uncommon for large corporations, and the final outcome may differ from the initial assessment.

As the situation develops, CG Power is expected to provide further updates to its shareholders and the market regulators, in line with its obligations under the SEBI Listing Regulations.