Tata Steel Limited has secured a favourable order from the Income Tax Appellate Tribunal (ITAT) for the fiscal year 2009, significantly reducing its aggregate tax exposure. The ruling allows the company's claim for interest expenditure deductions related to the Corus Group acquisition, cutting the remaining liability by ₹427 crore to approximately ₹1,259 crore.

This development follows a similar favourable order for FY2008 received in February 2026. The ITAT upheld the deduction claims under Section 36(1)(iii) of the Income Tax Act, 1961, reversing earlier disallowances by income tax authorities regarding loans utilized for acquiring the foreign subsidiary.

Tax Exposure Reduction Details

The tribunal's decision directly impacts the contingent liabilities reported in Tata Steel's financial statements. The reduction stems from the allowance of interest expenditure deductions that were previously disallowed.

The initial aggregate tax exposure for the period FY2008 through FY2015 was estimated at ₹1,901 crore. Following the FY2008 order, this was reduced to ₹1,686 crore. The latest FY2009 order further trims this figure to ₹1,259 crore, pending consequential orders from the Assessing Officer.

Background on Litigation

The dispute originated from the disallowance of interest expenditure claims for loans taken to acquire Corus Group Plc. For FY2009 specifically, the Deputy Commissioner of Income Tax had disallowed a claim of ₹813.65 crore in January 2014. Tata Steel appealed this decision, leading to multiple hearings before the final favourable order was dated September 18, 2026, and received on September 28, 2026.

What the Numbers Show

The sequential nature of these rulings suggests a pattern of favorable outcomes for the company's historical acquisition-related tax disputes. The ITAT explicitly followed the logic of the earlier FY2008 order when deciding the FY2009 case. This consistency provides a persuasive precedent for the remaining pending litigations covering the period FY2010 to FY2015, which constitute the bulk of the original ₹1,901 crore exposure. The company indicated that these orders will likely influence the outcome of these co-related cases.

The Calcutta High Court has issued an interim injunction preventing the Joint Plant Committee (JPC) from utilizing ₹2,970 crore deposited by Tata Steel Limited . The order, received on September 18, 2026, directs that the funds shall not be disbursed to third parties until the company’s pending appeal is resolved.

This legal development stems from ongoing litigation concerning loans availed by Tata Steel from the Steel Development Fund (SDF), managed by the JPC under the Ministry of Steel. The company had previously sought a waiver of these loans in parity with Steel Authority of India Limited (SAIL).

Litigation Background

Tata Steel filed a writ petition before the Calcutta High Court on April 2, 2024, following the rejection of its representation for loan waiver. On May 24, 2024, a Single Bench of the High Court dismissed the petition but granted the company liberty to approach the JPC. Subsequently, Tata Steel filed an appeal before a Division Bench of the same court, which remains pending.

During FY26, the company discharged its liability towards the JPC aggregating to ₹2,970 crore. This payment was made without prejudice to its rights and contentions in the ongoing appeal. The management believed interim protection was necessary to safeguard these deposited amounts.

Interim Order Details

Seeking to protect the deposited funds, Tata Steel filed Interim Application (IA) no. GA/2/2026 before the Calcutta High Court. The application sought an injunction on the JPC utilizing the said amount. The court heard the matter on September 17, 2026.

In its order dated September 17, 2026, the High Court disposed of the interim application with specific directions. It mandated that till the appeal is disposed of, the fund shall not be utilised or disbursed to third parties. This disclosure was made in compliance with Regulations 30 and 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.