Cummins India Limited has informed stock exchanges about receiving a penalty order from the Income Tax Department, marking a significant regulatory development for the engineering company. The disclosure was made on December 22, 2025, in compliance with SEBI listing regulations.

Penalty Details and Legal Action

The Assessment Unit of the Income Tax Department has imposed a penalty of ₹1,19,10,452 under Section 27(1)(c) of the Income Tax Act, 1961. Cummins India has highlighted that this penalty was levied without providing an opportunity to be heard, raising procedural concerns.

Background and Context

The penalty has been imposed solely on account of an underlying adjustment made during assessment proceedings. Cummins India has revealed that this adjustment has been duly contested by the company. The related appeal is presently pending before the Income Tax Appellate Tribunal, indicating ongoing legal proceedings on the matter.

Company's Response Strategy

Cummins India has announced its intention to file an appeal against this penalty order with the Appellate Authority. This legal recourse demonstrates the company's commitment to challenging what it perceives as an unjustified penalty imposed without due process.

Financial and Operational Impact

The company has provided assurance regarding the penalty's impact on its business operations:

• The penalty will not have any material impact on the company's financials
• No impact expected on operational activities
• No effect anticipated on other company activities

Regulatory Compliance

The disclosure was made under Regulation 30 read with Clause 20 of Para A of Part A of Schedule III of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. This demonstrates Cummins India's adherence to transparency requirements and regulatory compliance standards for listed entities.

Cummins India has received a favorable order from the Income Tax Appellate Tribunal (ITAT) dated December 4, 2025, securing substantial tax relief of ₹210.29 crores for Financial Year 2017-18. The tribunal's decision represents a significant victory for the capital goods manufacturer in its ongoing tax dispute with the Income Tax Department.

ITAT Order Details

The Income Tax Appellate Tribunal has granted comprehensive relief to Cummins India, with the order addressing multiple aspects of the tax dispute. The tribunal's decision includes granting relief on adjustments aggregating to ₹210.29 crores, while redirecting ₹13.11 crores to the Assessing Officer for revalidation and upholding a disallowance of ₹0.48 crores.

Company Response and Next Steps

Cummins India has disclosed that it is currently evaluating further action in relation to the disallowance of ₹0.48 crores upheld by the tribunal. The company made this disclosure under Regulation 30 of the SEBI Listing Regulations, demonstrating its commitment to transparent communication with stakeholders.

The company noted a delay in filing the disclosure, explaining that the physically signed order by ITAT has not yet been received. The disclosure was filed based on a copy of the order downloaded from the official ITAT website, with concerned teams analyzing the impact of the order.

Financial Impact and Strategic Significance

This favorable tribunal order provides Cummins India with substantial financial relief and improved cash flow position. The ₹210.29 crore relief amount represents a significant benefit that could enhance the company's financial flexibility and operational capabilities.

The resolution demonstrates Cummins India's effective legal strategy and compliance framework in handling complex tax matters. This development follows the company's earlier communications dated August 14, 2023, and December 19, 2023, indicating a prolonged legal process that has now reached a favorable conclusion for the company.