Madras HC Stay* Rane Holdings disclosed that *Madras High Court granted stay* on the penalty order obtained by RSSL. Company plans to contest and file appeal with CIT(Appeals) within 30 days.
[05/05, 07:41] sekarreporter1: https://scanx.trade/stock-market-news/companies/rane-holdings-discloses-madras-high-court-stay-order-obtained-by-subsidiary-rane-steering-systems-on-income-tax-penalty/39472441
[05/05, 07:41] Meta AI: *Rane Holdings – Madras HC Stay on Income Tax Penalty*
*Disclosure by Rane Holdings Ltd* | *March 2026*
—
*1. What Happened*
*Subsidiary*: Rane Steering Systems Private Limited (RSSL) – 100% owned by Rane Holdings
*Income Tax Order*: National Faceless Assessment Centre, dated *11.03.2026*
*Demand*:
– *Penalty*: ₹3.63 Cr
– *Tax demand*: ₹6.74 Cr
– *Total liability*: ₹10.37 Cr
*Assessment Year*: 2015-16 (FY 2014-15)
*Issue*: Reassessment u/s 147 of Income Tax Act – Revenue expenses disallowed u/s 37, added back as income
*2. Madras HC Stay*
Rane Holdings disclosed that *Madras High Court granted stay* on the penalty order obtained by RSSL. Company plans to contest and file appeal with CIT(Appeals) within 30 days.
*3. Case Background – Long Running Dispute*
1. *Sept 2025*: IT Dept’s National Faceless Appeal Centre dismissed RSSL’s appeal. ₹6.74 Cr demand upheld
2. *04.03.2026*: Income Tax Appellate Tribunal (ITAT) Chennai remanded case back to CIT(Appeals) for fresh adjudication
3. *Key issues remanded*:
– Jurisdictional validity to reopen assessment
– Revenue expense deductions wrongly treated as capital expenditure
4. *11.03.2026*: Despite ITAT remand, Dept passed penalty order. RSSL says penalty passed “without considering” ITAT direction
*4. Company’s Stand*
1. *Will contest penalty* – file appeal with CIT(Appeals)
2. *No impact on operations* – standard disclosure line: matter won’t derail strategic objectives
3. *Not related party transaction* – Parent clarified no promoter group conflict
*5. Pattern in Rane Group Tax Cases*
Auditor report shows multiple pending IT disputes for Rane (Madras) Ltd:
₹0.88 Cr for AY 2015-16, ₹12.99 Cr for AY 2021-22, etc. at CIT(Appeals).
Also separate ₹2.10 Cr penalty on RSSL for underreporting u/s 270A and ₹0.59 Cr transfer pricing adjustment for AY 2023-24.
—
*Bottom Line*: RSSL got hit with ₹10.37 Cr tax + penalty for AY 2015-16 after reassessment. ITAT told CIT(A) to rehear the case on merits on 04.03.2026, but Dept still passed penalty order on 11.03.2026. Rane got *Madras HC stay* on that penalty and will appeal. This is a remand-stage fight – not final liability yet.
The dispute is about revenue vs capital expense classification u/s 37. Same AY was already in news Sept 2025 when appeal was dismissed.
