Tax Assessment

Mastek Receives Final Income Tax Assessment Order for FY 2022-23; Plans to File Objections

NSE

mastek

BSE

523704

Mastek Limited has received a Final Assessment Order from the Income Tax Department for FY 2022-23 involving total tax additions of ₹123.58 crore, comprising transfer pricing and domestic tax adjustments. The company has identified errors in the computation sheet attached to the order and intends to challenge the assessment before appellate authorities. Management has stated that it does not expect any material impact on financials or operations.

PRICE-SENSITIVE TRIGGER

Event: Receipt of Final Assessment Order from Income Tax Department

Type: Tax Assessment / Regulatory Action

Impact: Neutral

Immediate Effect: Company plans to file objections before appellate authorities.

Key Metrics:

Transfer Pricing Addition: ₹90.95 crore
Addition Under Domestic Tax Laws: ₹32.63 crore
Total Addition Proposed: ₹123.58 crore
Penalty Proceedings: Initiated under Section 270A
Financial Impact Estimated by Company: No material impact anticipated

Highlight:

Total income addition proposed by tax authorities stands at ₹123.58 crore.

What Happened ?

Mastek Limited informed stock exchanges that it has received a Final Assessment Order from the Income Tax Department under Sections 143(3), 144C(3), and 144B of the Income Tax Act, 1961 for FY 2022-23.

The assessment order includes transfer pricing adjustments and additions under domestic tax provisions. In addition, the department has initiated penalty proceedings under Section 270A.

The company stated that it has identified multiple errors in the computation sheet accompanying the order and intends to pursue legal remedies through the appellate process.

Key Details

Assessment Order Details:

Income Tax Department is the authority issuing the order.
Final Assessment Order relates to FY 2022-23.
Transfer pricing adjustment proposed: ₹90.95 crore.
Domestic tax law adjustment proposed: ₹32.63 crore.
Aggregate addition proposed: ₹123.58 crore.
Order was received on May 30, 2026.
Penalty proceedings under Section 270A have been initiated.
Company intends to file objections before Income Tax Appellate Authorities within prescribed timelines.

Note:

Management believes the assessment contains computational and factual errors that can be challenged through the appellate mechanism.

Company’s Grounds for Challenge:

Tax liability has allegedly been computed using a higher tax rate.
Foreign tax credit has allegedly not been allowed appropriately.
Credit for advance tax paid by an amalgamated subsidiary has allegedly not been granted.
Management believes these issues are apparent from the assessment records.

Note:

The company expects these matters to be addressed through the appellate review process.

Risk Analysis

Summary:

The assessment order introduces tax litigation and potential contingent liability risk. However, management has expressed confidence that the order contains identifiable computational errors and does not currently expect a material financial impact.

Key Risks:

Potential tax dispute may continue through appellate proceedings.
Penalty proceedings under Section 270A remain open.
Final outcome depends on tax authority review and appellate decisions.
Regulatory and legal costs may arise during the resolution process.

Worst Case:

If appellate authorities uphold the assessment and associated penalties, Mastek may face additional tax outflows and related financial liabilities.

Risk Level: Medium

Company Commentary

The company does not envisage any material financial implication at this stage.
Errors have been identified in the computation sheet attached to the assessment order.
Objections and responses will be filed before appellate authorities within prescribed timelines.
Management believes there will be no impact on the company’s financials, operations, or business activities from the current assessment order.
The company intends to pursue available legal remedies under tax laws.

Official Exchange Filing: Mastek Limited