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 made another strategic acquisition in Chambal Fertilisers & Chemicals Ltd, purchasing an additional 500 equity shares through open market operations on February 25, 2026. This latest acquisition demonstrates the entity's continued confidence in the fertilizer company's prospects and follows its recent pattern of incremental shareholding increases.

Latest Share Acquisition Details

The most recent transaction involved the purchase of 500 equity shares executed through open market operations. While this acquisition represents a minimal percentage increase, it reflects the entity's ongoing investment strategy in the company.

Updated Shareholding Position

Following this latest acquisition, CM Airtime Promotion LLP's total shareholding in the company has increased to 1,444,830 shares. The entity's stake has grown from 1,444,330 shares to 1,444,830 shares, representing a 0.361% ownership position in the fertilizer company.

Company Capital Structure

Chambal Fertilisers & Chemicals Ltd maintains a stable capital structure with no changes resulting from this transaction. The company's equity base remains consistent at 400,652,297 equity shares, providing a clear framework for calculating ownership percentages.

Regulatory Compliance

The disclosure has been made in full compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, specifically under Regulation 29(2). CM Airtime Promotion LLP, registered with LLP Identification Number AAE-6579, has notified both the National Stock Exchange of India Limited and BSE Limited about this acquisition. The entity operates from its registered office at Mezzanine Floor, Hindustan Times House, Kasturba Gandhi Marg, New Delhi, ensuring transparency in its shareholding activities and adherence to regulatory requirements.