Sapphire Foods India Faces Bombay High Court Appeal on TDS Order
Sapphire Foods India Limited is subject to a Bombay High Court appeal by the Income Tax Department challenging an ITAT order. The appeal concerns TDS for AY 2016-17 and 2018-24. The ITAT ruled the company is not in default if tax is paid. The interest demand is reduced to ₹2.51 million.
The appeal pertains to TDS and affects multiple assessment years. Although the interest demand has been substantially reduced from ₹17.04 crore to ₹2.51 million, the continuation of litigation in a higher court like the Bombay High Court can still have implications for the company's financial and operational standing.
The Income Tax Department has filed an appeal against a favorable ITAT order. While the demand has been significantly reduced, the ongoing litigation introduces uncertainty. The outcome is not definitively positive or negative at this stage.
Sapphire Foods India Limited has disclosed further developments regarding a tax litigation. This announcement follows up on a previous intimation from June 26, 2025, concerning an order received under Section 250 from the Commissioner of Income Tax, Appeal Addl/JCIT(A), Ranchi.
The company had filed an appeal at the Income Tax Appellate Tribunal (ITAT), Mumbai, against the initial order. The ITAT pronounced its order on November 7, 2025, which was subsequently given effect by the Assistant Commissioner of Income Tax, OSD TDS Circle 2(2), Mumbai, on December 30, 2025.
The Income Tax Department (TDS) has now filed an appeal under Section 260A of the Income Tax Act, 1961, before the Hon'ble Bombay High Court. This appeal challenges the ITAT's order in favor of Sapphire Foods India for Assessment Years 2016-17 and 2018-19 to 2023-24.
The ITAT, in its November 7, 2025 order, ruled that the company cannot be considered an "assessee in default" under Section 201(1) of the Income-tax Act, 1961, if the underlying tax has been subsequently deducted and deposited. Furthermore, the ITAT stipulated that interest under Section 201(1A) should be restricted to the date of actual payment of such taxes.
As a result of the ITAT's order, the Assistant Commissioner of Income-Tax (TDS) issued a revised demand. The demand for interest under Section 201(1A) has been reduced to ₹2.51 million (25.1 lakh), a significant decrease from the original demand of ₹170.41 million (17.04 crore).
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