Chambal Fertilisers & Chemicals Limited has received an Income Tax penalty order of Rs 58,27,971 from the Assessment Unit of the Income Tax Department, as disclosed in a regulatory filing on February 26, 2026. The penalty was imposed under Section 270A of the Income Tax Act, 1961, for an alleged violation related to education cess deduction claims.

Penalty Details and Timeline

The company received the penalty order on February 25, 2026, which pertains to Assessment Year 2017-18. The penalty stems from what the Income Tax Department considers a wrong claim of deduction for education cess in the company's income tax return.

Background of the Violation

The penalty relates to the company's claim for deduction of Education Cess and Secondary & Higher Education Cess. Chambal Fertilisers had initially claimed this deduction based on a favorable decision from the Hon'ble Rajasthan High Court, Jaipur Bench, in the company's own case (Appeal No. 52/2018 for AY 2009–10, order dated July 31, 2018).

The High Court had ruled that education cess paid along with income tax does not fall within the ambit of "tax" under Section 40(a)(ii) of the Income Tax Act, 1961, and therefore was allowable as a deduction. However, the Finance Act, 2022 introduced a retrospective amendment that reversed this ruling.

Company's Response and Impact

Following the retrospective amendment, Chambal Fertilisers surrendered its claim for deduction of Education Cess and Secondary & Higher Education Cess and paid the applicable tax. The company has stated that there is no impact on its financial, operational, or other activities, except for the penalty amount mentioned.

Legal Challenge Planned

The company believes it has a strong case to contest the penalty order on merits and has announced its intention to challenge the order at the appropriate appellate forum. This indicates the company's confidence in its legal position despite the retrospective legislative changes.

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding material developments affecting the company.

CM Airtime Promotion LLP, a promoter group entity, has acquired additional equity shares in Chambal Fertilisers & Chemicals Ltd through open market purchase. The latest acquisition was disclosed to stock exchanges in compliance with regulatory requirements under SEBI takeover regulations.

Latest Transaction Details

The LLP purchased 12,499 equity shares on 20-Feb-26 through open market transactions. This acquisition represents 0.003% of the company's total share capital and voting rights.

Updated Shareholding Position

Following the recent acquisition, CM Airtime Promotion LLP's total shareholding in Chambal Fertilisers & Chemicals Ltd has increased from 1,344,829 shares to 1,357,328 shares.

Company Capital Structure

Chambal Fertilisers & Chemicals Ltd maintains a stable equity capital structure with no changes reported in the total share capital following this transaction.

Regulatory Compliance

The disclosure was made under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011. CM Airtime Promotion LLP, registered with LLP Identification Number AAE-6579, has its registered office at Mezzanine Floor, Hindustan Times House, 18-20, Kasturba Gandhi Marg, New Delhi-110001. The entity is classified as part of the promoter group of Chambal Fertilisers & Chemicals Ltd.