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 received a GST order from the Office of the Deputy Commissioner, State Tax Department, Uttar Pradesh (Noida), demanding Rs 2.15 crore for alleged violations pertaining to the financial year 2021-22. The order was received on December 30, 2025, at 10:32 AM (IST).

GST Order Details

The order has been issued under section 73(9) of the UPSGST Act and CGST Act by the Government of Uttar Pradesh. The company disclosed this development through a regulatory filing under Regulation 30 of the SEBI Listing Regulations.

Nature of Violations

The GST department has raised a demand on various matters along with levy of penalty and applicable interest. The total amount demanded is Rs 2,15,47,966 (Indian Rupees Two Crores Fifteen Lakhs Forty Seven Thousand Nine Hundred Sixty Six Only) for the assessment year 2021-22.

Company's Response and Impact

Max Estates has stated that there is no material impact on the financial, operational, or other activities of the company due to this order. The real estate firm has expressed confidence in its position and announced plans to challenge the order.

The company firmly believes it has strong legal and factual grounds to challenge the order and will pursue appropriate legal remedies, including filing an appeal before the relevant authorities. This represents a proactive approach to contest what the company views as an unjustified demand.

Previous GST Issues

This latest development comes after Max Estates had previously received a show cause notice from the GST department regarding approximately Rs 2.25 crore related to allegedly inadmissible input tax credit claims for the financial years 2018-19 to 2022-23. The earlier notice pertained to legal expenses incurred during business acquisitions and investments in companies under NCLT dispute.

The company continues to maintain that it will keep stakeholders informed about any material developments regarding these GST matters as they progress through the legal system.