Chambal Fertilizers & Chemicals Limited has informed the Exchange about Action(s) taken or orders passed
CHAMBLFERT · price
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Chambal Fertilizers has received an order from the Income Tax Department imposing a penalty of Rs. 1,35,24,064 (about Rs. 1.35 crore) under Section 270A of the Income Tax Act. The penalty relates to the company's earlier claim of deduction for Education Cess and Secondary & Higher Education Cess in its income tax return for Assessment Year 2020-21. The deduction was originally based on a favourable Rajasthan High Court ruling in the company's own case, but the Finance Act 2022 retrospectively reversed that ruling. The company subsequently surrendered the deduction and paid the tax, but the penalty has still been levied. The company states that the financial impact is limited to the penalty amount and it plans to challenge the order at an appellate forum.
The financial impact is minor and limited to the Rs. 1.35 crore penalty, which is small relative to the company's size. The order is being contested, so the actual outflow depends on the appeal outcome. Shareholders are unlikely to see any material effect on operations or stock price from this development.