Rane (Madras) Limited Receives Income Tax Show Cause Notice Worth ₹6.04 Crores
Rane (Madras) Limited has received a show cause notice from the Income Tax Department's National Faceless Assessment Centre for disallowance of ₹24.01 crores relating to derivative assets gain treatment and trademark fee expenditure for FY2022-23. The expected financial impact is ₹6.04 crores excluding interest and penalty. The company will file a suitable reply through tax consultants within prescribed timelines.
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Rane (Madras) Limited has informed stock exchanges about receiving a show cause notice from the Income Tax Department regarding disallowance of certain expenditures. The company disclosed this development under Regulation 30 of SEBI LODR regulations on February 21, 2026.
Notice Details and Financial Impact
The show cause notice was received from the Assessment Unit, National Faceless Assessment Centre, Income Tax Department on February 20, 2026. The notice relates to disallowance of ₹24.01 crores concerning treatment of gain arising from derivative assets and trademark fee expenditure.
| Parameter: | Details |
|---|---|
| Notice Type: | Show Cause Notice under Section 143(3) of Income Tax Act, 1961 |
| Disallowance Amount: | ₹24.01 crores |
| Expected Financial Impact: | ₹6.04 crores (excluding interest and penalty) |
| Assessment Year: | 2023-24 (Financial Year 2022-23) |
| Receipt Date: | February 20, 2026 |
Nature of Disputed Items
The Income Tax Department has raised concerns regarding two specific areas:
- Treatment of gain arising from derivative assets
- Trademark fee expenditure
These items form the basis of the ₹24.01 crores disallowance proposed by the tax authorities for the financial year 2022-23.
Company's Response Strategy
Rane (Madras) Limited has outlined its approach to address the notice. The company stated it will consult with its tax advisors and consultants to prepare a suitable reply. The response will be filed before the appropriate authority within the prescribed timelines as mandated by tax regulations.
Regulatory Compliance
The disclosure was made in compliance with Regulation 30 of SEBI LODR and the SEBI Master Circular dated January 30, 2026. The company has declared that all information provided is true, correct, and complete to the best of its knowledge and belief.
Financial Implications
While the total disallowance amount stands at ₹24.01 crores, the company expects the actual financial impact to be ₹6.04 crores. This figure excludes any applicable interest and penalty that may be imposed if the disallowance is upheld. The final financial impact will depend on the outcome of the company's response and subsequent proceedings with the tax authorities.
Historical Stock Returns for Rane Madras
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.30% | -3.65% | +8.26% | -5.05% | +26.59% | +192.73% |
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