Tata Steel Limited has achieved a significant legal victory in its long-standing tax dispute with income tax authorities, securing a favorable ruling that reduces its tax exposure by ₹215 crore. The Income Tax Appellate Tribunal delivered its order on February 20, 2026, allowing the company's claim for interest expenditure deduction related to its acquisition of Corus Group Plc.

Tax Dispute Background

The dispute originated when the Deputy Commissioner of Income Tax disallowed Tata Steel's claim for interest expenditure deduction under Section 36(1)(iii) of the Income Tax Act, 1961. The disallowance specifically targeted loans borrowed and utilized for acquiring Corus Group Plc, the company's foreign subsidiary. The original order was dated February 7, 2014, pertaining to FY2008, with similar disallowances made for subsequent years from FY2009 to FY2015.

Tribunal Proceedings and Outcome

Tata Steel filed its appeal against the February 2014 order on May 10, 2016, before the Income Tax Appellate Tribunal. The final hearing took place in November 2025, culminating in the favorable February 2026 ruling. The company received the tribunal's order on February 27, 2026, which specifically allows the deduction claim that had been previously disallowed by tax authorities.

Financial Impact and Implementation

The favorable tribunal order will require the Assessing Officer to implement the decision through a separate order, following standard tax procedure protocols. Tata Steel plans to make necessary adjustments in its contingent liability disclosure as part of its financial statements for FY2027.

Regulatory Compliance and Future Implications

The disclosure was made through a formal communication to stock exchanges on February 28, 2026, under reference SEC/1984/2025-26. This filing was made in compliance with Regulations 30 and 51 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Tata Steel believes this favorable ruling will have persuasive impact on related pending litigations covering the same issue for FY2009 to FY2015. The company faces similar disallowances for subsequent years within the disputed period, and this precedent-setting decision could influence those outcomes favorably, potentially providing additional tax relief in future proceedings.

Tata Steel Limited has disclosed that its wholly owned subsidiary Neelachal Ispat Nigam Limited (NINL) received a significant Show Cause Notice from the Odisha government authorities. The notice, dated February 25, 2026, involves a substantial financial claim of ₹587,86,25,047/- related to iron ore mining operations.

Show Cause Notice Details

The Show Cause Notice was issued by the Office of the Deputy Director of Mines, Koira Circle, Koira Steel & Mines Department, Government of Odisha. The authority is seeking recovery of the amount as shortfall towards additional charges on dispatch of Iron Ore between February 2022 and March 2025.

NINL's Corporate Structure Evolution

The disclosure provides context about NINL's ownership structure changes over recent years. In FY2023, Tata Steel acquired controlling stake in NINL through its erstwhile listed subsidiary Tata Steel Long Products Limited (TSLP). Following the amalgamation of TSLP with Tata Steel in FY2024, NINL became an indirect subsidiary. By FY2026, NINL became a wholly owned subsidiary of Tata Steel Limited.

Company's Response and Position

NINL has disputed the validity of the Show Cause Notice, maintaining that its Iron Ore Mine does not fall under the purview of Section 8A(8) of the Mines and Minerals (Development and Regulation) Amendment Act, 2021. The company considers the SCN erroneous and believes it may not be liable to pay the stated amount.

NINL's planned response includes:

• Formal response to the Show Cause Notice
• Pursuit of legal remedies before appropriate courts if necessary
• Challenge to the applicability of Section 8A(8) of MMDR Act to its operations

Financial and Operational Impact

According to the disclosure, there is no impact on financial, operational, or other activities of Tata Steel Limited or NINL arising from the Show Cause Notice. The management studied the SCN's impact before making this regulatory disclosure under SEBI regulations.

Regulatory Compliance

Tata Steel made this disclosure in compliance with Regulations 30 and 51 read with Part A, Para B of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company filed the disclosure on February 28, 2026, providing detailed annexure as required under SEBI regulations.