India Pesticides Limited appeals Rs 7.10 crore tax demand

India Pesticides Limited has appealed a Rs 7.10 crore income-tax demand, including interest, after the Assessing Officer added Rs 10.12 crore to undisclosed income for the block period from 1 April 2018 to 10 February 2025. India Pesticides filed its appeal in Lucknow on 24 July 2026 and said the eventual financial-statement impact is not ascertainable.

What triggered the income-tax proceedings against India Pesticides?

The proceedings followed a search by the Income Tax Department under Section 132 of the Income-tax Act, 1961, conducted at India Pesticides in December 2024. India Pesticides said no company assets were seized pursuant to that search, while the subsequent assessment process resulted in a disputed demand disclosed in its financial-results notes dated 3 November 2026.

The Department then issued a notice dated 4 September 2025 under Section 158BC of the Income-tax Act, requiring India Pesticides to prepare a true and correct return of undisclosed income. The requested return covered the block period from 1 April 2018 to 10 February 2025 and was required in the format prescribed under Rule 12AE of the Income-tax Rules, 1962.

India Pesticides filed the block-period income-tax return on 3 November 2025, declaring undisclosed income and depositing tax of Rs 18 lakh. The company also received a notice under Section 142(1), seeking details, documents and information, which it said were duly submitted to the Department.

How was the Rs 7.10 crore tax demand calculated?

The Rs 7.10 crore demand arose after additions of Rs 10.12 crore to undisclosed income, comprising Rs 7.47 crore under Section 69 and Rs 2.65 crore described as profit embedded in unaccounted sales for financial year 2024-25. India Pesticides said the demand includes interest and is net of the additional tax already paid of Rs 18 lakh.

The filing does not provide a separate break-up between the tax component and interest component within the Rs 7.10 crore demand. It also does not state a final liability because India Pesticides has challenged the demand and says the assessment proceedings have not been finalised.

The Section 69 addition accounted for the larger part of the Rs 10.12 crore aggregate, while the Rs 2.65 crore unaccounted-sales profit addition related specifically to FY 2024-25. India Pesticides did not disclose the underlying transactions, the basis of the Section 69 addition, or the composition of the stated unaccounted sales in the 3 November 2026 announcement.

How does the dispute compare with India Pesticides' latest results?

The Rs 7.10 crore contested demand compares with consolidated profit before tax of Rs 55.58 crore for the half year ended 30 September 2026, down from Rs 94.10 crore in the half year ended 30 September 2025. Consolidated profit after tax fell to Rs 41.19 crore from Rs 66.54 crore over the same comparison.

Consolidated revenue from operations declined to Rs 480.47 crore in the half year ended 30 September 2026 from Rs 565.54 crore a year earlier. Total income decreased to Rs 487.09 crore from Rs 579.26 crore, while total expenses declined to Rs 431.51 crore from Rs 485.16 crore, resulting in the lower reported profit before tax.

India Pesticides reported Rs 14.39 crore of consolidated total tax expense for the half year ended 30 September 2026, including Rs 87 lakh relating to earlier periods or years. The announcement does not link that earlier-period tax line to the Rs 7.10 crore disputed demand, so the two items cannot be treated as the same matter on the information disclosed.

What has India Pesticides done to contest the demand?

India Pesticides filed an appeal before the Joint Commissioner (Appeals)/Commissioner of Income-tax (Appeals), Lucknow, against the demand order on 24 July 2026. The company said it had carefully examined the notice of demand and, based on legal advice received, believes the demand is not tenable in law.

That view is India Pesticides' position rather than a determination by the appellate authority. The financial-results filing does not give a hearing date, a timetable for an appellate decision, or the amount, if any, that may ultimately be sustained, reduced or withdrawn from the Rs 7.10 crore demand.

India Pesticides said that, pending finalisation of the assessment proceedings, the impact on its financial results and any adjustments to the financial information are presently not ascertainable. The uncertainty therefore remained disclosed in the unaudited results for the quarter and half year ended 30 September 2026 rather than being quantified as an adjustment.

What operating context did India Pesticides report alongside the appeal?

India Pesticides identified Agro Chemicals as its sole operating segment under Indian Accounting Standard 108, or Ind AS 108, in the 30 September 2026 results. The company therefore did not present separate reportable segment figures that could associate the Rs 7.10 crore tax dispute with different products or business divisions.

For the quarter ended 30 September 2026, India Pesticides reported consolidated revenue from operations of Rs 228.71 crore, compared with Rs 290.36 crore in the corresponding quarter of 2025. Quarterly consolidated profit before tax was Rs 24.73 crore versus Rs 47.00 crore, while profit after tax was Rs 18.42 crore versus Rs 31.61 crore.

The Board approved the unaudited quarterly and half-yearly results on 3 November 2026 after Audit Committee review, and the statutory auditors carried out a limited review. India Pesticides' cash-flow statement showed Rs 9.02 crore of consolidated direct taxes paid, net, in the half year ended 30 September 2026, compared with Rs 15.88 crore in the prior-year half.

Conclusion

India Pesticides' disclosure connects a December 2024 tax search, the September 2025 block-return notice, its Rs 18 lakh tax deposit with the November 2025 return, and the July 2026 appeal. The immediate matter is the Assessing Officer's Rs 10.12 crore additions, which resulted in a Rs 7.10 crore tax-and-interest demand that India Pesticides disputes, while its financial impact remains unquantified.

The next development to watch is finalisation of the assessment proceedings and the appeal before the Lucknow appellate authority. India Pesticides did not disclose a hearing or decision date, and a resolution could determine whether any adjustment is required to the financial information for the half year ended 30 September 2026.