Litigation / Regulatory Update

MRF Receives Favorable ITAT Orders; Tax Demands for AY2015-16 and AY2016-17 Reduced to Nil

NSE

mrf

BSE

500290

MRF Limited informed stock exchanges about favorable developments in ongoing income tax litigations for Assessment Years 2015-16 and 2016-17. The Income Tax Appellate Tribunal (ITAT) allowed the company’s appeals on major grounds and remanded remaining matters for fresh verification, resulting in tax demands being reduced to nil.

PRICE-SENSITIVE TRIGGER

Event: Update on ongoing income tax litigation proceedings

Type: Litigation / Regulatory Update

Impact: Positive

Immediate Effect: The reduction of disputed tax demands to nil significantly lowers immediate financial exposure and strengthens MRF’s litigation position

Key Metrics:

Assessment Year 2015-16 Disputed Amount: ₹89.62 crore
Assessment Year 2016-17 Disputed Amount: ₹92.46 crore
Combined Litigation Exposure Earlier: ₹182.08 crore
Current Tax Demand Status: Reduced to Nil following ITAT orders

Highlight:

Highlight: Tax Demand Reduction
Value: ₹182.08 crore disputed exposure reduced to nil

What Happened ?

MRF Limited disclosed updates regarding two ongoing income tax litigations involving the Income Tax Authority (Deputy Commissioner of Income-Tax, Central Circle 3(3), Chennai).

The disputes related to Assessment Years 2015-16 and 2016-17, where appeals had been filed before the Income Tax Appellate Tribunal (ITAT) over disallowance of claims.

The ITAT allowed the company’s appeals on major grounds and restored remaining matters to the Assessing Officer for fresh verification. Following the tribunal’s decisions, the tax demands in both cases have been reduced to nil.

key highlights

Income Tax Litigation Update:

The opposing party in both cases is the Income Tax Authority, Central Circle 3(3), Chennai.
The AY2015-16 litigation was initiated on March 15, 2024.
The AY2016-17 litigation was initiated on March 26, 2024.
The disputed amount for AY2015-16 was ₹89.62 crore.
The disputed amount for AY2016-17 was ₹92.46 crore.
The Income Tax Appellate Tribunal allowed MRF’s appeal on major grounds in both cases.
Remaining matters were restored to the Assessing Officer for fresh verification.
Following the ITAT orders, the tax demands in both matters have been reduced to nil.
No litigation against key management personnel or promoters was disclosed in relation to these proceedings.
No settlement or compensation details were applicable in the disclosed matters.

Note:

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as part of ongoing litigation updates for the quarter ended March 31, 2026.

Risk Analysis

Key Risks

Certain matters have been sent back to the Assessing Officer for fresh verification.
Final closure of proceedings may depend on subsequent assessment outcomes.
Tax litigations can continue over extended timelines despite favorable tribunal orders.
Any adverse reassessment outcome could potentially revive portions of disputed claims.

Worst Case Scenario

If reassessment proceedings lead to unfavorable findings, part of the disputed tax liabilities could re-emerge in future proceedings.

Risk Level: Medium

Company Commentary

MRF updated exchanges regarding ongoing tax litigation proceedings.
ITAT allowed the company’s appeals on major grounds.
Remaining issues were restored for fresh verification.
Tax demands for both assessment years were reduced to nil after the tribunal’s decision.
The disclosure was filed in compliance with SEBI LODR Regulations.

Official Exchange Filing: MRF Limited