Timken India Limited has informed stock exchanges about receiving an income tax demand notice of ₹74.77 crores for assessment year 2022-23, following an order passed by the Income Tax Department's Assessment Unit under transfer pricing regulations.

Transfer Pricing Dispute Details

The Income Tax Department issued an order under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961, specifically targeting the company's transfer pricing methodology for its distribution segment. The department disagreed with Timken India's methods for determining arm's length pricing in transactions with associated enterprises and adopted alternative methods to decide the arm's length price.

Financial Impact and Company Response

The IT Department calculated Timken India's income for assessment year 2022-23 to be ₹89.08 crores higher than what the company had stated in its return. Consequently, a demand notice under Section 156 of the Act was issued, requiring payment of ₹74.77 crores, which includes interest under various sections of the Income Tax Act.

Timken India has contested the order, describing it as "clearly erroneous, flawed and not sustainable." The company has indicated its intention to file an appeal before the appropriate authority to get the order quashed or rectified.

Company's Statement on Financial Impact

Despite the substantial demand notice, Timken India has stated that it does not anticipate any immediate financial or monetary impact from this development. The company's position appears to be based on its view that the IT Department's order can be challenged through the appellate process.

The disclosure was made pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency with stakeholders regarding this regulatory development.

Timken India Limited has successfully resolved a consumer dispute case through an amicable settlement, avoiding potential financial penalties of ₹25,000. The company informed stock exchanges on December 17, 2025, about the favorable resolution of an appeal filed against a District Consumer Commission order.

Case Background and Original Dispute

The dispute originated from a share transmission request made by Mr. Ravi Shankar Sood in 2020-21. The shares were originally held in the name of his father, Mr. D.N. Sood, who passed away in 2013. CB Management Services Private Limited, serving as the Registrar and Transfer Agent (RTA), requested Mr. Sood to provide relevant documents as per SEBI Guidelines for the transmission process.

A disagreement arose when the RTA claimed it did not receive the requisite documents and therefore did not process the transmission. However, Mr. Sood maintained that he had submitted all necessary documents for the share transmission.

District Commission Order and Penalties

Mr. Sood filed a complaint before the District Consumer Disputes Redressal Commission, Shimla, alleging deficiency in service by the RTA and company in processing the share transmission. The District Commission ruled in favor of Mr. Sood and issued specific directions to resolve the matter.

The original order required the RTA and company to process the transmission within 60 days of receiving all documents and completing formalities. Additionally, the District Commission imposed financial penalties on both entities.

Appeal and Settlement Resolution

Timken India Limited and the RTA filed an appeal against the District Commission's order before the State Consumer Disputes Redressal Commission, Himachal Pradesh. During the pendency of the appeal proceedings, all parties engaged in settlement discussions and reached a mutually acceptable resolution.

The State Commission disposed of the appeal with the consent of all parties involved. Importantly, the settlement was concluded without any costs, compensation, or penalty imposed on the company or its RTA.

Financial and Operational Impact

The company has confirmed that the settlement has no financial, operational, or other impact on its activities. The successful resolution means Timken India Limited and its RTA are not required to pay the originally awarded ₹15,000 compensation and ₹10,000 litigation costs to Mr. Sood.

This favorable outcome demonstrates the company's commitment to resolving disputes through appropriate legal channels while protecting shareholder interests. The settlement approach also reflects efficient dispute resolution practices that avoid prolonged litigation costs and potential reputational impacts.