Fusion Finance Limited has secured a significant legal victory after the Income Tax Appellate Tribunal (ITAT), New Delhi, dismissed appeals filed by the Income Tax Officer (ITO) challenging the company's tax position. The tribunal's orders, dated May 29, 2026, result in the deletion of total tax demands amounting to ₹27.80 crore across two assessment years. This decision resolves the dispute regarding the appropriate rate of tax withholding on interest payments made to foreign Non-Convertible Debenture (NCD) holders, confirming that the company is not liable for the additional demands raised by the tax authorities.

The disputes arose from allegations that the company was an "assessee in default" for deducting tax at a lower rate. The ITO had contended that interest payments to foreign NCD holders attracted a withholding rate of 20% plus cess and surcharge under Section 196D read with Section 115AD of the Income Tax Act, 1961. However, the company had already withheld tax at 5% plus cess and surcharge under Section 194LD of the Act. The ITAT's dismissal of the ITO's appeals validates the company's adherence to the provisions of Section 194LD.

The favorable outcome covers demands for Assessment Year 2020-21 and Assessment Year 2021-22. For AY 2020-21, the tribunal dismissed a total demand of ₹16,62,03,454, which included a tax liability of ₹9,54,65,663 and an interest liability of ₹7,07,37,791. Similarly, for AY 2021-22, the dismissed demand totaled ₹11,18,43,066, comprising a tax liability of ₹7,10,23,805 and an interest liability of ₹4,08,19,261.

Breakdown of Dismissed Demands

The legal proceedings involved multiple stages. The company had initially filed appeals on July 12, 2024, against the alleged orders under Section 201 of the Act. These appeals were decided in the company's favor by the Commissioner of Income Tax (Appeals) on July 28, 2025. Subsequently, the ITO filed appeals before the ITAT on September 29, 2025, challenging those orders. The recent ITAT orders mark the final dismissal of the revenue department's challenges, concluding the litigation for these periods.

Fusion Finance stated that there is no impact on its financials, operations, or other activities as a result of these orders. The company became aware of the orders during a routine review of communications on the ITAT website, as the formal intimation was not received via email. The disclosure was submitted to the exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Fusion Finance announced that Independent Director Ms. Ratna Dharashree Vishwanathan has completed her second and final term, ceasing to be a Director of the company effective May 23, 2026. The disclosure was made pursuant to Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors and the Management of fusion finance placed on record their sincere appreciation for her valuable guidance and contributions during her tenure.

Board Acknowledgement

The Board acknowledged Ms. Vishwanathan's role as a Non-Executive and Independent Director, noting her significant contributions to the company's governance framework and strategic initiatives since 2018. The requisite details regarding the completion of tenure have been submitted to the stock exchanges and are available on the company's website.

Tenure Details

Ms. Vishwanathan formally informed the Board about the conclusion of her tenure, expressing pride in the collective achievements during her service period. She highlighted the strengthening of corporate governance practices and the advancement of key strategic initiatives as notable accomplishments during her time on the Board.