The Income Tax Department has issued a demand notice of ₹601.84 crore to Allied Blenders and Distillers Ltd and its wholly-owned subsidiary, Madanlal Estates Pvt Ltd. The demand includes both income tax and interest liabilities, following assessment proceedings related to a search operation conducted in December 2023. The company has assured investors that the notice will have no financial impact on its operations, as the promoter has committed to covering any potential liabilities.

Details of the Tax Demand Notice

The Office of the Deputy Commissioner of Income Tax, Central Circle 8(2), Mumbai, issued the notice under Section 156 of the Income Tax Act, 1961. This follows the assessment order under Section 143(3) read with Section 147 of the Act.

• For Allied Blenders and Distillers Ltd:

  • Tax Liability: ₹352.31 crore

  • Interest: ₹249.14 crore

  • Assessment Years Covered: 2014-15 to 2024-25

• For Madanlal Estates Pvt Ltd (subsidiary):

  • Tax Liability: ₹0.39 crore

  • Interest: ₹0.19 crore

  • Assessment Year Covered: 2021-22

The company received the notice on March 28, 2025, while the subsidiary received it on March 29, 2025.

Background: IT Department’s Search Operation

The Income Tax Department conducted a search operation in December 2023 at various premises linked to Allied Blenders and Distillers Ltd. Following the investigation, authorities made additions and disallowances to the company’s filed returns, leading to the current tax demand.

Financial and Operational Impact on Allied Blenders

Despite the substantial ₹601.84 crore tax demand, Allied Blenders has assured its investors that:

• The assessment orders will not affect its ongoing operations.

• The company believes the tax additions are unjustified and plans to appeal.

• The promoter chairman has committed to personally covering any financial impact through permissible instruments, ensuring no financial burden on the company.

Company’s Response and Appeal Plan

Allied Blenders and Distillers Ltd has firmly stated that the tax demand will be challenged through legal proceedings. The company will:

• File an appeal against the assessment order as per legal provisions.

• Seek relief from higher tax authorities, expecting a favorable outcome.

• Continue business as usual, assuring stakeholders that the situation is under control.

What’s Next for Allied Blenders?

The appeal process will determine whether the tax demand will be upheld, reduced, or waived. Historically, companies have succeeded in getting tax demands modified if they can prove errors in assessment or unjustified additions.

For investors and industry watchers, this case serves as a reminder of the complexities of corporate tax assessments in India. Allied Blenders' ability to navigate the legal and financial aspects of this tax dispute will be closely monitored.

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