Tamilnad Mercantile Bank Faces Income Tax Demand of Rs. 204.23 Crore
Tamilnad Mercantile Bank Limited (TMB) announced that the Assessment Unit of the Income Tax Department issued a demand notice on March 18, 2026. The notice, dated March 17, 2026, details a demand of Rs. 2,04,23,11,454 (Rupees Two Hundred Four Crore Twenty-Three Lakh Eleven Thousand Four Hundred Fifty-Four Only).The demand stems from a disallowance of a claim under Section 36(1)(viia) of the Income Tax Act, 1961, for the Assessment Year 2013-14. The action was taken under Section 156 of the Income Tax Act, 1961, and sections 147 and 254 read with section 144B.
According to the company, the demand notice would not have a material impact on the bank’s financial statement and the bank intends to file an appeal, which is expected to be passed in its favor.
Below is a summary of the details provided:
| S.No. | Particulars | Description |
|---|---|---|
| 1 | Name of the authority | Assessment Unit, Income Tax Department |
| 2 | Nature and details of the action(s) taken, initiated or order(s) passed | Raised a demand of Rs.2,04,23,11,454/- (Rupees Two Hundred Four Crore Twenty-Three Lakh Eleven Thousand Four Hundred Fifty-Four Only) on the Bank, under the provisions of section 156 of the Income Tax Act, disallowing the claim made under Section 36(1) (viia) of the Income Tax Act, 1961 for A.Y. 2013-14. |
| 3 | Date of receipt of direction or order, including any ad-interim or interim orders, or any other communication from the authority | March 18, 2026. |
| 4 | Details of the violation(s) / contravention(s) committed or alleged to be committed | The Assessment Unit, Income Tax Department vide notice no. ITBA/AST/S/156/2025-26/1087516521(1) dated March 17, 2026, raised a demand by disallowing the claim made under Section 36(1) (viia) of the Income Tax Act, 1961 for A.Y. 2013-14. |
| 5 | Impact on financial, operation or other activities of the listed entity, quantifiable in monetary terms to the extent possible. | A monetary demand of Rs.2,04,23,11,454/- (Rupees Two Hundred Four Crore Twenty-Three Lakh Eleven Thousand Four Hundred Fifty-Four Only) was imposed on the Bank. The Bank is in the process of filing an appeal and the same is expected to be passed in favour of the Bank. This demand notice would not have material impact on the bank's financial statement. |
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