Religare Enterprises’ Subsidiary CHIL Faces ₹104.77 Crore Tax Demand #religare #religareshare

Care Health Insurance Limited (CHIL), a material subsidiary of Religare Enterprises Limited (REL), has received two Income Tax Orders under Section 147 of the Income-tax Act, 1961, from the Office of the Assistant Commissioner of Income-Tax, Central Circle 6(2), Mumbai. The orders raise a tax demand of ₹104.77 crore (including interest) for Assessment Years 2020-21 and 2021-22.

Key Points of the Dispute:

The tax demand is based on adjustments made by the assessing officer, including:

• Disallowance of Claims Incurred But Not Reported (IBNR) and Claims Incurred But Not Enough Reported (IBNER) under Section 37(1).
• Disallowance of unsettled claims outstanding.
• Disallowance under Section 40(a)(ia) for non-deduction of TDS on certain expenses.
• Disallowance of certain marketing and advertisement expenses under Section 37(1).

CHIL has cited favorable rulings from the Delhi High Court, ITAT Delhi, and CIT (Appeals) in earlier years, arguing that these issues are industry-wide and not unique to the company.

Next Steps:

CHIL, based on legal advice, plans to appeal against the orders before the appropriate forum within the prescribed timeline. The financial impact of this demand, if enforced, would be borne by CHIL, though the company remains confident in its legal position.

This development will be closely monitored as CHIL navigates the legal process.

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