Background of Tax Dispute
- The Bank had received an assessment order under Section 143(3) of the Income-tax Act, 1961 in February 2020 for Assessment Year (AY) 2018-19 with certain additions/disallowances
- The Bank was subsequently subjected to reassessment proceedings for AY 2018-19
- A reassessment order was passed under Section 147 read with Section 144B of the Act in March 2024, making additional additions/disallowances to the income determined in the original assessment order
- Pursuant to the reassessment order, an additional tax demand (including interest) of ₹112.81 Crores was raised against the Bank
- This additional demand was previously disclosed via letter reference no. YBL/CS/2023-24/183 dated March 28, 2024
Appellate Proceedings
- The Bank filed appeals before the first level appellate authority against both the assessment and reassessment orders
- The first level appellate authority passed orders on:
- October 27, 2025: For the assessment order
- December 30, 2025: For the reassessment order
Current Development
- Pursuant to the appellate authority's orders, the Bank received a consolidated Order Giving Effect (OGE) from the Jurisdictional Assessing Officer (JAO) in Mumbai
- The OGE determines a refund of ₹879 Crores (Rupees Eight Hundred and Seventy-nine Crores only)
- The refund comprises two components:
1. Interest income determined under Section 244A of the Income-tax Act
2. Tax benefit of a certain expense claimed in the income-tax return
- The cumulative quantum of these two items exceeds the materiality threshold of approximately ₹120 Crores as prescribed under the amended SEBI Listing Regulations
Financial Implications
- Quantum of claim: ₹879 Crores refund received
- No compensation or penalty implications as the matter has been resolved in the Bank's favor