News Stocks Exato Technologies Receives Favourable Income Tax Order, Demand Reduced by 94% to ₹4.09 LakhExato Technologies Receives Favourable Income Tax Order, Demand Reduced by 94% to ₹4.09 Lakh
Exato Technologies Limited received a favourable Income Tax order on January 27, 2026, reducing its tax demand for Assessment Year 2024-25 from ₹73.42 lakh to ₹4.09 lakh. The total outstanding demand including interest decreased from ₹78.56 lakh to ₹5.89 lakh, representing a 92.5% reduction. The relief was granted following the company's rectification application under Section 154, which addressed issues related to non-allowance of MAT credit and clerical errors in the original assessment.
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Exato Technologies Limited has received substantial relief from the Income Tax Department, with its tax demand for Assessment Year 2024-25 being reduced by over 94% from ₹73.42 lakh to ₹4.09 lakh. The company made this disclosure on January 28, 2026, in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The company received an intimation letter dated January 27, 2026, regarding an order under section 154 read with section 143(1) of the Income-tax Act, 1961. This development represents a significant positive outcome for the technology company, which had previously disclosed the higher tax demand in its Red Herring Prospectus dated November 21, 2025.
Background of the Tax Demand
The original tax demand had emerged when Exato Technologies filed its Income Tax Return for Assessment Year 2024-25 under the normal provisions of the Income Tax Act, 1961. The subsequent intimation order issued under section 143(1) raised a substantial tax demand primarily due to two key issues: the non-grant of eligible Minimum Alternate Tax (MAT) credit under section 115JAA and an inadvertent increase in assessed income.
Recognizing these apparent mistakes in the intimation order, the company filed a rectification application under section 154 of the Act. The application specifically highlighted the non-allowance of MAT credit that was legitimately carried forward from earlier years, along with other clerical errors that had resulted in the inflated demand.
Revised Tax Demand Details
The Income Tax Department's favourable order has resulted in dramatic reductions across all components of the demand:
| Component: | Original Demand | Revised Demand | Reduction |
|---|---|---|---|
| Tax: | ₹73.42 lakh | ₹4.09 lakh | ₹69.33 lakh |
| Interest: | ₹4.40 lakh | ₹1.79 lakh | ₹2.61 lakh |
| Total: | ₹78.56 lakh | ₹5.89 lakh | ₹72.67 lakh |
The reduction was achieved primarily through the grant of MAT credit under section 115JAA of the Income-tax Act, 1961, and correction of the assessed income. This represents a total relief of ₹72.67 lakh, reducing the overall outstanding demand by approximately 92.5%.
Regulatory Compliance and Disclosure
Exato Technologies has fulfilled its disclosure obligations under SEBI regulations by promptly informing BSE Limited about this development. The company's communication, signed by Company Secretary and Compliance Officer CS Geeta Jain, included detailed annexures as required under SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023.
The favourable outcome demonstrates the effectiveness of the company's approach in addressing the initial assessment discrepancies through proper legal channels. This significant reduction in tax liability is expected to have a positive impact on the company's financial position and removes a substantial contingent liability that was previously disclosed in the company's offer documents.
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