Voith Paper Fabrics India Limited has received an assessment order from the Income Tax Department demanding ₹3.82 crore for Assessment Year 2023-24. The demand arises from transfer pricing adjustments accepted by the Department after review by the Dispute Resolution Panel (DRP).

The company filed its return of income on November 28, 2023, declaring a total taxable income of ₹43.07 crore. The case was selected for complete scrutiny under the Computer Assisted Scrutiny Selection (CASS) system, primarily flagged for high-risk international transactions and discrepancies in Tax Deducted at Source (TDS) disallowances.

Transfer Pricing Adjustments and DRP Review

The Transfer Pricing Officer (TPO) initially proposed an upward adjustment of ₹12.24 crore to the total income, citing that international transactions with Associated Enterprises were not at arm's length. Key issues included the Trading Segment, Marketing Support Services, Royalty payments, and Intra-Group Services.

The assessee filed objections before the Hon'ble DRP, which directed the TPO to modify certain adjustments. Following these directions, the TPO issued a revised computation on September 24, 2026, reducing the total adjustment to ₹10.87 crore. The Assessing Officer subsequently passed the final assessment order under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961, on September 25, 2026.

Breakdown of Revised Adjustments

The final total income was determined at ₹53.94 crore, up from the returned income of ₹43.07 crore. The table below details the specific transfer pricing adjustments as per the final order:

The Trading Segment adjustment was reduced because the DRP excluded certain functionally dissimilar comparables and upheld the Resale Price Method (RPM) with a revised arm's length margin of 41.75%. The Royalty and Intra-Group Services adjustments remained unchanged, as the DRP found no evidence of actual service receipt for the latter and deemed the royalty rate excessive compared to market benchmarks.

Financial Impact and Compliance

The aggregate income tax liability, including interest under Section 234B, amounts to ₹14.58 crore. After adjusting for prepaid taxes of ₹11.18 crore, the net demand payable is ₹3.82 crore. Penalty proceedings under Section 270A for under-reporting of income have been initiated separately.

The company stated it shall explore available options and take appropriate action in accordance with the Income Tax Act, 1961. The demand notice requires payment within 30 days of service, failing which interest and recovery proceedings may follow.

Voith Paper Fabrics India Limited has initiated a postal ballot exercise to appoint Asesh Kumar Mukherjee as Director and Managing Director. Shareholders can cast their votes electronically through a remote e-voting facility opening on September 17, 2026, and closing on October 16, 2026.

Voting Timeline and Eligibility

The remote e-voting process commences at 9:00 am on Thursday, September 17, 2026, and concludes at 5:00 pm on Friday, October 16, 2026. Shareholders holding shares as of the cut-off date, September 11, 2026, are eligible to participate. The Board of Directors appointed CS P C Jain of M/s. P.C. Jain & Co. as the Scrutinizer for the process.

The electronic copy of the postal ballot notice was dispatched via email on September 15, 2026, to members who have registered their email addresses with the company or their depository participants by the cut-off date. The notice is also accessible on the company’s website and the platforms of CDSL and BSE Limited.

Resolutions for Approval

Shareholders will vote on two special resolutions regarding the appointment of Mr. Asesh Kumar Mukherjee (DIN: 11908288):

A notice under Section 160 of the Companies Act, 2013, was received from a member proposing Mukherjee's candidature as a Director.

Procedures for Shareholders

Members holding shares in physical form who have not registered or updated their email addresses must submit specific documents to the company’s Registrar and Transfer Agent (RTA), MCS Share Transfer Agent Limited. Required documents include:

• A duly filled and signed request letter in Form ISR-1
• A self-attested copy of a PAN card linked with Aadhaar
• A self-attested copy of address proof documents such as an Aadhaar card, driving licence, election identity card, or passport

Shareholders holding shares in demat mode are advised to ensure their valid email IDs are updated with their respective depository participants. Members who did not receive the notice can obtain it by emailing admin@mcsregistrars.com or investorcare.vffa@voith.com .

The result of the postal ballot will be declared within two working days from the conclusion of the remote e-voting period.