Rane Holdings Limited has informed stock exchanges about a penalty order received by its wholly owned subsidiary from the Income Tax Department. The disclosure was made under Regulation 30 of SEBI LODR regulations on March 12, 2026.

Penalty Details and Financial Impact

Rane Steering Systems Private Limited (RSSL), the wholly owned subsidiary of Rane Holdings, received an order from the Income Tax Department's National Faceless Assessment Centre imposing a penalty under Section 271(1)(c) of the Income Tax Act, 1961. The penalty relates to additions made during reassessment proceedings under Section 147 of the Income Tax Act.

Company's Response and Legal Action

RSSL has decided to contest the penalty order and will file an appeal before the Commissioner of Income Tax (Appeals) within the prescribed time limits. The company maintains its position against the penalty imposed by the tax authorities.

Background and Timeline Issues

The penalty order was issued despite a significant development in the case. The Income Tax Appellate Tribunal had remanded the appeal back to the Commissioner of Income Tax (Appeals) through their order dated March 04, 2026. The Tribunal's directive was for the Commissioner to consider the merits of the case and adjudicate the matter properly.

Regulatory Compliance

The disclosure was made in compliance with Regulation 30 of SEBI LODR regulations, specifically under Part A Para B.8 Schedule III. This follows previous communications from the company dated March 11, 2026 and September 09, 2025 regarding disallowance of certain revenue expenses by the Income Tax Authority relating to RSSL.

The company has declared that all information provided in the disclosure is true, correct and complete to the best of their knowledge and belief, as required under Regulation 30(13) of SEBI LODR.

Rane Holdings has received a favorable development in a tax dispute involving its wholly owned subsidiary, as the Income Tax Appellate Tribunal remanded a significant tax case back to lower authorities for fresh consideration. The tribunal's order dated March 04, 2026, provides relief to Rane Steering Systems Private Limited (RSSL) in a matter involving Rs.6.74 crores in tax demands.

Tribunal Order Details

The Income Tax Appellate Tribunal 'C' Bench in Chennai has remanded the appeal back to the Commissioner of Income Tax (Appeals) for fresh adjudication on critical tax matters. The order was received by RSSL on March 11, 2026, following the company's earlier disclosure in September 2025 regarding the initial tax department order.

Key Issues Under Review

The tribunal has directed fresh consideration of two primary matters that form the core of the tax dispute:

• Jurisdictional validity for reopening the original assessment
• Revenue expense deductions that were disallowed under Section 37 of the Income Tax Act, 1961, and treated as capital expenditure instead

The original dispute arose when the Income Tax Department's National Faceless Appeal Centre disallowed certain revenue expenses claimed by RSSL, treating them as capital expenditure and creating the substantial tax demand.

Company's Response Strategy

RSSL is now awaiting a hearing from the Commissioner of Income Tax (Appeals) office following the tribunal's remand order. The company has indicated its preparedness to provide comprehensive supporting documentation and justification for the allowability of the disputed revenue expenses.

Regulatory Compliance

The disclosure was made under Regulation 30 of SEBI LODR regulations, specifically Part A Para B.8 Schedule III, which requires listed companies to inform exchanges about material communications from regulatory authorities. Rane Holdings has confirmed that all information provided in the regulatory filing is true, correct, and complete to the best of their knowledge.

The remand order represents a significant procedural victory for the Rane Group subsidiary, as it provides a fresh opportunity to present its case on both jurisdictional and substantive tax matters before the appellate authority.

Source: None/Company/INE384A01010/e10516a5-049e-4ced-8c7c-a8a7033d9198.pdf