ZF Steering Gear (India) Limited has received an unfavorable outcome in its long-standing tax appellate proceedings, with the Commissioner of Income Tax (Appeals) disallowing the company's deduction claims for multiple assessment years spanning nearly a decade. The company has subsequently provided clarification to BSE regarding the timing of its regulatory disclosure.

Appellate Proceedings Outcome

The Commissioner of Income Tax (Appeals)-28, Delhi, has disposed of the company's appeals through orders dated March 27, 2026, disallowing ZF Steering Gear's claims for deduction under Sections 80-IA and 80-IB of the Income Tax Act, 1961. These claims covered assessment years from 1995-96 to 2004-05.

Disclosure Timeline Clarification

Following BSE's inquiry about the delay in disclosure, ZF Steering Gear provided detailed clarification on April 2, 2026. The company explained that the Income Tax Department orders were received via email on Friday, March 27, 2026, during the latter part of the day between 7:23 pm to 7:38 pm. The communication comprised ten separate emails for each assessment year, with each email containing detailed orders of approximately 50+ pages.

Review Process and Compliance

Considering the volume and complexity of the documents, the company undertook a detailed review and verification process to assess the contents and implications of the orders before making any public disclosure. The detailed examination was carried out on Monday, March 30, 2026, as the subsequent days were non-working days. Upon completion of the review and internal discussions, the necessary disclosure was promptly made to the Stock Exchange on the same day at 12:34 PM.

Financial Impact Assessment

Despite the adverse ruling, ZF Steering Gear has clarified that there will be no additional financial burden on the company. During the original assessment proceedings, the company had already discharged the entire tax demand arising from such potential disallowances before filing appeals with the Tribunal. The company emphasized that adequate provisions had already been made in the books and IT demands already paid in earlier financial years.

Company's Position

ZF Steering Gear stated that the disclosure was made after proper verification and assessment of voluminous information received after the close of business hours, and was neither intentional nor due to any negligence. The company remains committed to timely disclosures and is preparing to challenge the CIT(A)'s decision through appropriate channels, including filing rectification applications and pursuing further appeals before higher appellate authorities.

ZF Steering Gear (India) Limited has successfully completed the assignment of leasehold rights between its wholly owned subsidiaries, following approval from the Maharashtra Industrial Development Corporation (MIDC) and execution of the lease deed on March 18, 2026.

Transaction Completion Details

The company has finalized the assignment of leasehold rights for Plot No. E-3/2, MIDC Supa Parner Industrial Park, Ahilyanagar, Maharashtra, along with the factory building constructed thereon. The transaction involved the transfer of rights from NexSteer Systems Private Limited to DriveSys Systems Private Limited, both wholly owned subsidiaries of ZF Steering Gear India.

MIDC Approval and Lease Execution

Following earlier intimations to BSE Limited dated January 1, 2026 and July 26, 2025, the Maharashtra Industrial Development Corporation granted permission for the assignment of leasehold rights. Subsequently, DriveSys executed the lease deed with MIDC on March 18, 2026, with NexSteer joining as the confirming party.

Regulatory Compliance

The transaction has been executed at arm's length price in accordance with applicable laws. This development follows the company's disclosure in its Board Report for FY 2024-25 regarding the proposed assignment of leasehold rights between the subsidiaries.

This strategic realignment of leasehold rights between subsidiaries represents an important operational milestone for ZF Steering Gear India, enhancing the company's asset management and operational efficiency across its subsidiary network.