NSE/BSE Codes: BSE: 532460, NSE: PONNIERODE

Summary of Key Information:

Nature of Event / Disclosure:

Regulatory disclosure under SEBI (LODR) Regulations, 2015, Regulation 30, regarding the receipt of an interim order from the Hon'ble High Court of Madras in an ongoing transfer pricing litigation.

Involved Parties / Authorities:

  • Opposing Parties:

1. Commissioner of Income Tax (Transfer Pricing) (CIT-TP), Chennai

2. Deputy Commissioner of Income Tax (Transfer Pricing), Chennai (TPO)

3. Deputy Commissioner of Income Tax, Large Taxpayer Unit, Chennai

4. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi

  • Adjudicating Authority: Hon'ble High Court of Madras

Date / Timeline of Event:

  • October 26, 2023: Original Transfer Pricing Officer (TPO) order passed for Assessment Year (AY) 2021-22.
  • March 27, 2026: Commissioner of Income Tax (Transfer Pricing) (CIT-TP) passed a revision order u/s 263 of the Income Tax Act, 1961, setting aside the TPO's order.
  • March 28, 2026: Company informed the exchanges about the CIT-TP order.
  • April 27, 2026: Hon'ble High Court of Madras passed the interim order.
  • May 26, 2026 (15:21 hrs): Company received a copy of the interim order from its legal counsel and filed this disclosure.

Brief Description of Outcome / Dispute:

The dispute concerns the determination of the Arm's Length Price (ALP) for the inter-unit transfer of bagasse from the sugar unit to the eligible co-generation unit for AY 2021-22. The CIT-TP found the original TPO order to be erroneous and directed the TPO to revise it after applying the correct law. The company filed a Writ Petition to quash the CIT-TP's order and sought an interim stay.

The Hon'ble High Court of Madras, in its interim order dated April 27, 2026, has:

  • Admitted the Writ Petition filed by the company.
  • Directed the TPO to pass appropriate orders pursuant to the CIT-TP order dated March 27, 2026.
  • However, stayed the effect and operation of any order to be passed by the TPO. This stay will remain in effect subject to the final outcome of the Writ Petition.
  • Stated that the TPO's proceedings will be without prejudice to the rights and contentions of the Company in the Writ Petition.

Impact of Outcome:

Financial Impact:

The company states that there would be multiple consequential financial impacts for several years. The precise quantification, though material, is not possible at this juncture. No specific monetary figure for the potential tax liability or penalty is disclosed.

Operational / Business / Strategic Impact:

No material disclosures in this section. The disclosure is focused on the legal and financial implications of the tax dispute.

Other Implications:

The interim stay granted by the High Court provides temporary relief to the company, preventing immediate financial outgo or enforcement actions by the tax authorities until the Writ Petition is finally decided.

Next Steps / Required Actions:

The TPO is directed to pass appropriate orders as per the CIT-TP's directive. However, these orders will not be given effect until the final disposal of the company's Writ Petition by the Hon'ble High Court of Madras. The company will continue to litigate the matter.