Yes Bank received a tax demand of Rs 2,209 crore for the assessment year 2019–20, even though the reassessment grounds have been set aside. The demand notice, issued by the income-tax department on March 28, drew a sharp response from the bank, which termed it as “without any basis.”
The reassessment was carried out by the National Faceless Assessment Unit after the I-T department reopened the case in April 2023. However, Yes Bank, in its regulatory filing, stated that the original income assessed under section 144 of the Income Tax Act remained unchanged.
“The grounds on which the reassessment proceedings were initiated have been dropped,” the bank noted, emphasising that no fresh disallowances or additions had been made. Consequently, it argued, “no demand should have been raised,” reported Business Today.
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Legal Challenge on the Horizon
Despite these developments, a demand notice under section 156 was raised, requiring the bank to pay Rs 2,209.17 crore, which includes Rs 243.02 crore in interest. Yes Bank maintained that the order appeared to lack merit and assured that it has strong grounds to contest it. The bank further clarified that the demand is not expected to have a significant impact on its financial or operational stability.
To challenge the order, Yes Bank planned to initiate appeal and rectification proceedings under the applicable legal framework.
The tax dispute comes at a time when the bank’s stock is experiencing continued pressure. On March 28, shares of Yes Bank closed at Rs 16.88 on the BSE, marking a decline from the previous day’s close of Rs 17.26. During the session, the stock fluctuated between an intraday high of Rs 17.50 and a low of Rs 16.83.
Market analysts highlighted ongoing technical weakness in the stock, with bearish EMA crossovers and a position below key moving averages contributing to selling pressure.
Over the past year, Yes Bank shares dropped 27.24 per cent, significantly underperforming the broader banking sector and benchmark indices such as the Sensex, which declined by only 1.27 per cent in the same period.
Despite posting a 108 per cent year-on-year increase in net profit for Q3 FY24-25 and demonstrating an improvement in asset quality, investor sentiment around the stock remained muted.
