Samvardhana Motherson International Limited announced that its indirect wholly owned subsidiary, Motherson Lumen North America Inc. (MLNA), has been imposed a penalty of USD 225,000 (approximately INR 21.53 million) by the US Internal Revenue Service (IRS). The penalty relates to alleged non-reporting of financial transactions for the financial year 2024. MLNA believes the penalty was issued in error and intends to file an appeal with the IRS for its complete abatement.
US Subsidiary Receives IRS Penalty
Samvardhana Motherson International Limited has disclosed a penalty levied by the US Internal Revenue Service (IRS) on its indirect wholly owned subsidiary, Motherson Lumen North America Inc. (MLNA). The penalty amounts to USD 225,000, which is equivalent to approximately INR 21.53 million.
Reason for Penalty and Company’s Stance
The penalty was reportedly imposed for alleged non-reporting of financial transactions between related foreign parties, specifically concerning IRS Form 5472 for the financial year 2024. MLNA has stated that the penalty was issued in error. The company explained that while the IRS approved a change in MLNA’s U.S. tax year-end from June 30 to March 31, its systems were not updated, leading to an automated penalty notice.
Appeal Process Initiated
MLNA has indicated that it previously addressed this matter with the IRS and had received compliance confirmation. Consequently, the subsidiary plans to file an appeal with the IRS seeking the complete abatement of this erroneous penalty order. The company has also stated that there is no material impact on its financials or operations as a result of this inadvertent order.
Source: BSE
