Ponni Sugars gets HC interim order on tax dispute for AY 2021-22

Ponni Sugars (Erode) Limited has received an interim order from the Hon'ble High Court of Madras concerning its tax litigation for Assessment Year 2021-22. The court admitted the Writ Petition filed by the company and directed the Transfer Pricing Officer (TPO) to pass appropriate orders pursuant to an earlier directive from the Commissioner of Income Tax (Transfer Pricing). The operation of the TPO's order remains subject to the final outcome of the Writ Petition.

The dispute relates to the determination of the Arm's Length Price (ALP) for the inter-unit transfer of bagasse from the sugar unit to the eligible co-generation unit. On March 27, 2026, the CIT-TP had set aside the TPO's earlier order dated October 26, 2023, and directed a revision. The company subsequently filed the Writ Petition to quash the CIT-TP order and seek an interim stay.

In its order dated April 27, 2026, the Hon'ble High Court of Madras instructed the TPO to issue orders following the CIT-TP's directive. However, the court clarified that the effect and operation of the TPO's order would remain subject to the final outcome of the Writ Petition and without prejudice to the company's rights and contentions.

The company received a copy of the interim order from its legal counsel on May 26, 2026. The disclosure was made to the exchanges under Regulation 30 of the SEBI (LODR) Regulations, 2015.

Litigation Details

The following table outlines the key particulars of the litigation and the court's order:

Particulars	Details
Opposing Parties	1) Commissioner of Income Tax (Transfer Pricing) (CIT-TP), Chennai; 2) Deputy Commissioner of Income Tax (Transfer Pricing), Chennai (TPO); 3) Deputy Commissioner of Income Tax, Large Taxpayer Unit, Chennai; 4) The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi.
Court/Authority	Hon'ble High Court of Madras
Development	The Hon'ble High Court of Madras admitted the Writ Petition and directed the TPO to pass appropriate orders pursuant to the CIT-TP order dated March 27, 2026. The operation of the TPO's order is subject to the final outcome of the Writ Petition.
Date of Order	April 27, 2026
Date of Receipt	May 26, 2026
Financial Impact	The company stated that there would be multiple consequential impacts for several years, but precise quantification is not possible at this juncture.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.02%	-1.36%	+3.85%	+13.26%	-6.29%	+42.75%

Ponni Sugars (Erode) Limited has filed its Secretarial Compliance Report for the financial year ended March 31, 2026, with the stock exchanges. The report, issued by V Suresh Associates, Practising Company Secretaries, confirms that the listed entity has complied with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Compliance Status

The audit examined the company's adherence to various SEBI regulations, including those related to insider trading, buybacks, and share-based employee benefits. The report states there were no events during the audit period concerning capital issuance, substantial acquisition of shares, or buybacks of securities. Consequently, the company reported no deviations or non-compliances.

Key Findings

The report highlights the company's adherence to secretarial standards and the maintenance of its functional website. It confirms that all applicable policies under SEBI Regulations were adopted by the board of directors and updated timely. Additionally, the company has conducted performance evaluations of the Board and its committees as prescribed.

Sr. No.	Particulars	Compliance Status
1	Secretarial Standards	Yes
2	Adoption and timely updation of Policies	Yes
3	Maintenance and disclosures on Website	Yes
4	Disqualification of Director	Yes
5	Details related to Subsidiaries	Not Applicable

The report further notes that no action has been taken against the listed entity, its promoters, or directors by SEBI or the stock exchanges. It also confirms compliance with regulations regarding the preservation of documents and the disclosure of events or information under Regulation 30.

Auditor Certification

V Suresh Associates certified the report based on an examination of documents, records, and filings made by the company. The firm clarified that the report is neither an audit nor an expression of opinion on the financial records. It is intended solely for the purpose of compliance with Regulation 24A of the SEBI (LODR) Regulations, 2015.