Suzlon Energy gets two tax penalty orders; company calls it 'premature'. Details here

Suzlon Energy on Thursday said the I-T department issued two income tax penalty orders to it for financial year 2015-16 (FY16) and FY17. The two penalty orders were worth Rs 87.59 crore and Rs 172.76 crore, respectively.

"This is to inform that National Faceless Assessment Centre, Income Tax Department, has issued orders for FY 2015-16 and FY 2016-17 levying penalty in respect of disallowance of claim of depreciation on goodwill, disallowance u/s.14A and disallowance u/s.36(1)(va). The details, as required, in terms of the Listing Regulations are as per enclosed Annexure," Suzlon stated in a BSE filing.

"Based upon the judicial precedents, the company believes that the penalty proceedings should have been kept in abeyance until conclusion of the quantum appeal against disallowances. Given that the quantum appeal against subject disallowances is still pending before the Tribunal on merits, Suzlon also believes that the said penalty orders are premature," it also said.

Suzlon further mentioned that it is in the process of challenging penalty orders before appellate/judicial forums and is confident of defending the same.

On the stock-specific front, Suzlon extended its gains for the second straight session in previous trade. The stock surged 5 per cent to hit its upper circuit level of Rs 40.47. At this price, it has gained 8.76 per cent in two trading days.

Despite the mentioned rise, the stock was down 20.21 per cent from its one-year high price of Rs 50.72, a level seen last month on February 2. Even so, the counter has given multibagger returns by rallying 473.23 per cent as against its 52-week low price of Rs 7.06, hit on March 29, 2023, when it turned into a penny stock.

Bourses BSE and NSE have put the securities of Suzlon under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

Suzlon Group has recently announced that CRISIL has upgraded its ratings to 'A‐' with Positive Outlook in alignment with the company's strengthened financial position, operational excellence and favourable sectoral tailwinds.

"The rating upgrade factors in, higher than expected improvement in the margins of WTG business while maintaining healthy cash flow generation from the O&M services business, and an uptick in the order book providing visibility for future revenues," the group said.

On technical setup, the counter traded higher than the 5-day, 10-, 20-, 150-day and 200-day simple moving averages (SMAs) but lower than the 30-day, 50-day and 100-day SMAs. The scrip's 14-day relative strength index (RSI) came at 50.84. A level below 30 is defined as oversold while a value above 70 is considered overbought.