Income Tax Dept Slaps Huge Penalty on Rane Subsidiary for Under-Reporting Income

Income Tax Dept Slaps Rs. 2.10 Crore Penalty on Rane Subsidiary for Under-Reported Income. The Company had received an official communication dated June 26, 2025, via email from the income tax department’s assessment unit.

The company, i.e., Rane Holdings Limited, has issued this regulatory filing under Regulation 30 of SEBI LODR (Listing Obligations and Disclosure Requirements), which says that if any important event or legal issue happens that could affect the company, it must share the information with the stock market and its investors.

Here in this disclosure, the matter revolves around Rane Steering Systems Private Limited (RSSL), which is a wholly owned subsidiary of Rane Holdings Limited. Meaning, Rane Holdings holds complete 100% operations of RSSL.

The official communication sent by the Income Tax Department mentioned that it discovered discrepancies and errors during assessment for the financial year 2019-20 (Assessment Year 2020-21). According to the department, the company is alleged to have under-reported its income. Specifically, the income details are captured in Form 26AS. Form 26AS is a tax form that displays all the income of the taxpayer and the tax deducted from it. The form did not align with the income declared by the RSSL in its tax returns.

Hence, the department has now imposed a penalty of Rs. 2.10 crores on the company under Section 270A of the Income Tax Act, 1961. The section deals with the amounts of penalties imposed when income is under or misreported by the taxpayer.

However, RSSL disagrees with this penalty and says it will contest the tax demand by raising an appeal against the appropriate authority. Meaning, the company is thinking of challenging the penalty order issued by the tax department. Rane Holdings Limited has confirmed in this disclosure that they have followed the correct compliance procedures and have not broken any law.