The income tax department has imposed a whopping tax penalty on Larsen & Toubro, a big engineering and construction house. According to reports, the quantum of penalty is more than Rs 4.68 crore in a tax dispute related to the firm’s former subsidiary, L&T Hydrocarbon Engineering .

LTHE was merged with L&T in 2021. However, the income tax department seems to have found some discrepancies related to the tax filings of the subsidiary. Though the nature of the discrepancy is not known, it has resulted in an enormous penalty for the merged company.

In response to the penalty, L&T issued a statement, saying that it disagrees with the tax department’s estimation. The company will challenge this penalty through an appeal process. This would mean that there is a court battle ahead between L&T and the income tax department in the coming months.

The story shows the complexity in corporate tax regimes in India. Large companies like L&T cannot avoid challenges related to their tax compliance. The business community and experts in taxation would be watching the outcome of the appeal by L&T.