Whalesbook
The Indian Hume Pipe Co. Ltd. has disclosed receiving two penalty orders from the Income Tax Department for Assessment Year 2023-2024, totaling ₹5.73 crore.
The penalties include ₹5.10 crore for alleged income under-reporting linked to a Section 54D deduction, and ₹0.63 crore for alleged unexplained purchases.
The company is contesting these demands and has already filed appeals against the underlying disallowances. Indian Hume Pipe expects these new penalty orders will not have a material financial impact.
These tax demands highlight the ongoing scrutiny tax authorities apply to income reporting and expense sourcing. Established in 1926, Indian Hume Pipe is a prominent player in India's infrastructure sector, manufacturing and laying pipelines for water supply, sewerage, and irrigation projects, as well as supplying railway sleepers. The company has navigated tax challenges in the past, including a 2017 Supreme Court ruling on its works contracts and earlier service tax demands in 2007.
Indian Hume Pipe is preparing to appeal these specific penalty orders. Shareholders are being informed of these potential tax liabilities, although management disputes the demands and expects no material financial impact from the appeals process.