Max Estates Limited has disclosed to stock exchanges that its subsidiary Max Square Limited has received a penalty order under Section 270A of the Income-tax Act, 1961. The penalty, amounting to ₹35.48 lakh, was imposed by the Assessing Officer for alleged under-reporting of income for Assessment Year 2021-22.

Background of the Tax Dispute

The penalty order follows a previous ruling by the National Faceless Appeal Centre (NFAC) under Section 250 of the Income-tax Act, 1961, which was communicated by the company on June 5, 2025. The NFAC had confirmed an addition of ₹63.78 lakh under the head "Income from Other Sources," resulting in a tax demand of ₹21.13 lakh for AY 2021-22.

Nature of Alleged Violation

The penalty has been imposed for alleged under-reporting of income in consequence of mis-reporting. Specifically, the tax authorities allege that Max Square Limited failed to offer ₹63.78 lakh of interest income earned on fixed deposits during project development as "Income from Other Sources" for FY 2020-21.

Current Legal Status

Max Square Limited has challenged the NFAC order by filing an appeal before the Income Tax Appellate Tribunal. According to the company's disclosure, the hearing has been concluded and the order is awaited. The subsidiary is also evaluating further legal options in the matter.

Financial Impact Assessment

Max Estates has stated that the financial impact of this penalty is not material at the consolidated level and does not affect the company's operations. The penalty order was received on December 31, 2025, and the company made the disclosure on January 1, 2026, in compliance with SEBI regulations.

Regulatory Compliance

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, following the guidelines specified in SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024. The company has provided detailed information about the penalty order as required under the regulatory framework.

Max Estates Limited has successfully completed its acquisition of Base Buildwell Private Limited (BBPL), transforming the target company into a wholly-owned subsidiary effective December 26, 2025. The completion was formally communicated to stock exchanges as an update to the company's earlier intimation dated September 6, 2025.

Acquisition Details

The acquisition encompasses the complete ownership structure of BBPL, with Max Estates acquiring 100% of both equity share capital and Compulsorily Convertible Debentures (CCDs). The transaction structure demonstrates a comprehensive takeover approach.

This acquisition represents 100% of BBPL's share capital on a fully diluted basis, ensuring complete control and ownership for Max Estates.

Regulatory Compliance

The completion follows proper regulatory procedures under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The transaction was conducted in accordance with Regulation 30 and Schedule III, along with SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

The formal completion occurred on December 26, 2025 at 17:00 hours IST, marking the official transition of BBPL to wholly-owned subsidiary status. All required details under the SEBI Master Circular were previously provided in the September 6, 2025 intimation.

Strategic Implications

With BBPL now operating as a wholly-owned subsidiary, Max Estates has expanded its corporate structure and operational capabilities. The acquisition provides the company with complete control over BBPL's assets, operations, and strategic direction, potentially enhancing its position in the real estate sector.

The transaction represents a significant corporate development for Max Estates, demonstrating its commitment to growth through strategic acquisitions and subsidiary expansion.