The Income Tax Department has sent CreditAccess Grameen a tax claim for AY 2022–2023 of Rs 46.03 crore

The microfinance firm CreditAccess Grameen said on Wednesday that it has received a demand order on March 19, 2024, from the Income Tax Department, Ministry of Finance, Government of India, requesting an extra tax demand of Rs 46.03 crore for AY 2022–2023. As per the company’s regulatory filing, “We hereby inform you that the Income Tax Department, Ministry of Finance, Government of India, on March 19, 2024, has received Demand Order, seeking additional tax demand of Rs 46.03 crore for AY 2022–2023 under Section 143(3) read with section 144B of the Income Tax Act, 1961.”

It said that the order was received by the business on March 19, 2024, and it was dated March 18, 2024.

CreditAccess Grameen, in response to the demand order, said that it believes the notice is based on false information and presumptions and that the management is confident in pursuing this matter with the IT department to fully clarify the issue. “The company would be taking all necessary steps to take this to the logical conclusion and protect its interests, based on the advice from tax experts.” We want to reaffirm that the company has always upheld the greatest standards of honesty, corporate governance, and transparency in all facets of its business, including timely tax payment, and that it is still dedicated to doing so,” the statement said.

The microfinance company insisted that because the “demand is factually incorrect and is not tenable in law,” there would be no meaningful effect on the business’s finances or operations.

As the deadlines for submitting orders for mismatches in tax payment, erroneous tax credit claims, and errors in tax returns submitted for FY19 and FY20 expire on April 30 and August 31, respectively, indirect tax specialists predict a barrage of tax letters in the coming months.

“GST is a new tax regime, and there will be different positions that companies and tax authorities will take with respect to transactions in the initial years of its implementation,” said Sohrab Bararia, partner in tax at Grant Thornton Bharat, in a previous FinancialExpress piece. The tax notifications that have been sent out recently pertain to the 2017–18 fiscal year, and the deadline for submitting orders—basically, letters of show-cause combined with tax demand—lapsed on December 31, 2023.

He had said, “As tax authorities scrutinize transactions and returns for the next two years, there will be more tax notices.”