EIH Hotels receives ₹92.56 lakh income-tax penalty for AY 2016-17
- EIH Hotels received a ₹92.56 lakh penalty for AY 2016-17 under Section 271(1)(c)
- Penalty relates to Transfer Pricing Adjustment of ₹1.83 crore and Section 40(a)(i) disallowance of ₹0.84 crore
- CIT(A) granted partial relief, but consequential order is pending, leading to protective penalty levy
- Company has appealed to Income Tax Appellate Tribunal and denies income concealment
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EIH Hotels received a penalty of ₹92.56 lakh from the Income-tax Department under Section 271(1)(c) of the Income-tax Act, 1961, for Assessment Year 2016-17.
The disclosure was made to stock exchanges on October 1, 2026, pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The order was received on September 30, 2026.
Penalty Basis and Disallowances
The penalty stems from additions and disallowances made during assessment proceedings. The specific components of the disputed amount are detailed below:
| Component | Amount |
|---|---|
| Transfer Pricing Adjustment | ₹1.83 crore |
| Disallowance under Section 40(a)(i) | ₹0.84 crore |
| Total Penalty Levied | ₹92.56 lakh |
Appellate Status and Company Response
The company noted that appellate proceedings before the Commissioner of Income-tax (Appeals) [CIT(A)] resulted in partial relief on both issues. However, the consequential appeal-effect order has not yet been passed by the jurisdictional Assessing Officer. Consequently, the penalty was levied on a protective basis and is liable to be modified upon giving effect to the appellate order.
EIH Hotels has preferred further appeals before the Income Tax Appellate Tribunal regarding the amounts still under dispute. The company is also pursuing consequential appeal effect before the jurisdictional tax authorities based on the relief granted by the CIT(A).
EIH stated it believes it has adequate grounds to contest the penalty on merits. The company clarified that the order arises from tax adjustments and does not relate to concealment of income. The financial impact remains subject to modification pending the outcome of appellate proceedings.
Historical Stock Returns for EIH Hotels
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.03% | -2.20% | -1.50% | -5.21% | -26.24% | +110.55% |
How might the pending Income Tax Appellate Tribunal decision influence EIH Hotels' effective tax rate and net profit margins in upcoming quarters?
What are the potential implications of the transfer pricing adjustments for EIH's related-party transactions and future compliance strategies?
Could the unresolved consequential appeal effect order lead to additional liquidity constraints or working capital pressures for EIH Hotels?
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