Indian Hume Pipe Company Ltd. Reports Income Tax Penalty Order
The Indian Hume Pipe Company Limited received orders from the Assessment Unit, Income Tax Department, NAFAC, Delhi, on March 31, 2026, related to income tax assessments for the Assessment Year 2023-2024.Penalty Order Under Section 270A
The company received an order dated March 31, 2026, under Section 270A of the Income Tax Act, 1961, imposing a penalty of Rs. 5,10,20,732. This penalty is based on the alleged under-reporting of income and misreporting of income. The order follows a disallowance of a deduction claimed under Section 54D of the Act, amounting to Rs. 7,30,03,569, initially made in an assessment dated March 25, 2025, and subsequently confirmed by the Commissioner of Income Tax (Appeals) on August 30, 2025. The company has filed an appeal with the Income Tax Appellate Tribunal (ITAT) in Mumbai on October 29, 2025, challenging the disallowance, and the appeal is currently pending. The company plans to appeal the penalty order before the Commissioner of Income Tax (Appeals), arguing that the penalty is unjustified. The company anticipates the demand will subside, stating that the rejection of the deduction is due to a difference in interpretation of law rather than incorrect reporting of income.
Penalty Order Under Section 271AAC
Separately, the company received an order under Section 271AAC of the Income Tax Act, imposing a penalty of Rs. 63,10,816, relating to alleged unexplained purchases. The company intends to appeal this penalty order before the Commissioner of Income Tax (Appeals) and expects to reasonably substantiate its position with factual and legal grounds. The company anticipates the demand will subside, and notes that the matter will not materially impact its financial, operational, or other activities.
Table: Penalty Order Under Section 270A
| Particulars | Details |
|---|---|
| Opposing Party | Assessment Unit, Income Tax Department, NAFAC, Delhi |
| Dispute/Litigation | Order dated March 31, 2026, under Section 270A of the Income Tax Act, 1961, levying a penalty of Rs. 5,10,20,732 for alleged under-reporting and misreporting of income related to disallowance of deduction under Section 54D amounting to Rs.7,30,03,569. |
| Expected Implications | The company expects the demand to subside and believes it has adequate factual and legal grounds to support its position. |
| Quantum of Claim | As per Clause A(iii) above |
Table: Penalty Order Under Section 271AAC
| Particulars | Details |
|---|---|
| Opposing Party | Assessment Unit, Income Tax Department, NAFAC, Delhi |
| Dispute/Litigation | Order dated March 31, 2026, under Section 271AAC of the Income Tax Act, imposing a penalty of Rs. 63,10,816 for alleged unexplained purchases. |
| Expected Implications | The company expects the demand to subside and believes it has adequate factual and legal grounds to support its position. The company notes that the matter will not materially impact its financial, operational, or other activities. |
| Quantum of Claim | As per Clause A(iii) above |
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