SRF Limited: Income Tax Dept Order of ₹327.44 Cr Demand Due to Technical Error
SRF Limited disclosed a ₹327.44 crore tax demand, including ₹101.77 crore interest, arising from a technical error by the Income Tax Department for AY 2022-23. The company has filed a rectification application and an appeal, expecting the demand to be reversed with no immediate financial impact.
A tax demand of ₹327.44 crores, even if disputed, can potentially impact cash flows and financial statements if not resolved favorably. The company is pursuing legal remedies, but the magnitude of the demand warrants a medium impact assessment.
While the tax demand is significant, the company's management believes it's due to a technical error and expects it to be reversed. There is no immediate financial impact stated. The sentiment is neutral as the outcome is uncertain, but the company is taking legal recourse.
SRF Limited has disclosed a litigation update concerning an assessment order for Assessment Year 2022-23 issued by the Assessment Unit, Income Tax Department. The order, under Section 143(3) of the Income Tax Act, 1961, initially made additions to taxable income amounting to ₹30.54 crores. However, due to a technical error, a demand of ₹327.44 crores was raised, which includes ₹101.77 crores in interest under Section 234B of the Income Tax Act, 1961.
SRF Limited has filed a rectification application before the Assessing Officer on 10th March 2026, and as a precautionary measure, an appeal was filed before the Income Tax Appellate Tribunal (ITAT) on 19th March 2026. Management is of the view that the entire demand will be reversed upon rectification of the technical error and believes the order is not legally sustainable.
The company stated that there is no immediate impact on its financial, operational, or other activities. The disclosure is being made as a matter of abundant caution to maintain the highest standards of corporate governance and transparency, as the demand arose from a technical error.
What to do with a filing like this
SRF Limited filed this with the NSE as a statutory disclosure, categorised under litigation updates. It is a primary document, not a recommendation, and the desk marks it medium impact: worth reading, rarely worth acting on by itself.
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