Dr. Reddy's Laboratories Limited has informed the Exchange about Pendency of Litigation(s)/dispute(s) or the outcome impacting the Company
DRREDDY · price
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Dr. Reddy's Laboratories has informed exchanges that the Telangana High Court has granted an interim stay on the income tax reassessment proceedings linked to the merger of Dr. Reddy's Holding Limited (DRHL) into the company. The Income Tax Authority had issued a show cause notice in April 2025 and an order under Section 148A(3) on May 30, 2025, seeking to reopen the assessment for Assessment Year 2020-21 on grounds of alleged tax escapement from the amalgamation. The company filed a writ petition challenging this order, and the court has now stayed both the Section 148A(3) order and the Section 148 notice until the next date of hearing. The company firmly believes there was no tax escapement from the merger. Additionally, the merger scheme includes a clause where the promoters will jointly and severally indemnify the company against any liability arising from the amalgamation.
This is a relief for shareholders as the court has paused the reassessment, reducing immediate financial risk from the disputed tax claim. The promoter indemnification clause further protects the company, but the matter remains pending final resolution at the next hearing.