India >> Tamil Nadu >> Chennai

Shriram Properties receives penalty order of INR 446.79 crore

PNT Reporter | Last Updated : 5th Apr, 2024

Synopsis

Real estate developer Shriram Properties faces a penalty of INR 446.79 crore from the Income Tax Department for FY 2017-18 under Section 270A. The penalty, related to share sales in its subsidiary, was issued under Section 153C. Shriram Properties contests the penalty in the Madras High Court, citing a 'status quo' order. Section 270A allows penalties for concealed income or incorrect filings, ranging from 100% to 300% of evaded tax. The case highlights the intricacies of tax laws in India, emphasising the need for companies to maintain accurate records and seek professional guidance for compliance.

Real estate developer Shriram Properties has been issued a penalty order of INR 446.79 crore by the Income Tax Department for the financial year 2017-18. The deputy commissioner of Income Tax, Central Circle 1(4) Chennai, issued this penalty order under Section 270A in connection with ongoing income tax proceedings initiated under Section 153C. Section 153C empowers the tax department to make adjustments to a taxpayer's income if it believes transactions were not conducted at fair market value.

The penalty is related to the sale of shares in Shriram Properties and Infrastructure, a subsidiary of the company.

However, Shriram Properties has challenged this penalty order. The company claims the matter is already under dispute before the Madras High Court, which has previously issued a 'status quo' order, essentially freezing any actions until the court reaches a decision.

Section 270A of the Income Tax Act empowers the Income Tax Department to levy penalties if it discovers income has been concealed or incorrect tax returns have been filed. The penalty amount can be significant, ranging from 100% to 300% of the tax evaded.

While the penalty amount is substantial, it's important to remember it's not a final judgement. The ongoing court case will determine the validity of the penalty. In the meantime, the company has indicated they will continue operations as usual.

This situation highlights the complexities of tax regulations in India. Companies are advised to maintain meticulous records and seek professional advice to ensure compliance with tax laws.

Next (BMC issues notices to Mumbai Metro contractors for outstanding property tax dues)

India >> Tamil Nadu >> Chennai

Shriram Properties receives penalty order of INR 446.79 crore

Synopsis

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