Drug firm Zydus Lifesciences Ltd on Tuesday (December 26) said its wholly-owned subsidiary Zydus Healthcare Ltd (ZHL) has received a demand notice of ₹284.58 crore under Section 143(1) of the Income Tax Act, 1961.
"This is to inform you that Zydus Healthcare Limited (ZHL), a wholly-owned subsidiary of the company has received an intimation under section 143(1) of the Income Tax Act, 1961 (IT Act), determining demand of ₹284.58 crore, while processing the Return of Income of ZHL," according to a stock exchange filing.
The Centralised Processing Centre (CPC) of the Income Tax Department issued the intimation, citing apparent mistakes during the processing of ZHL's income tax return for the assessment year 2023-2024.
The identified issues include the disallowance of claims for deduction under sections 80-IE and 80-JJAA of the I-T Act without basis and a shortfall in crediting taxes deducted or paid. ZHL has contested these determinations and believes that, upon rectification, the entire demand will be nullified.
Zydus Healthcare disagreed with the demand through the e-filing portal of the Income Tax Department. Additionally, the company plans to submit a rectification application under Section 154 of the I-T Act, both to the CPC and the jurisdictional assessing officer.
The company's legal counsel has expressed confidence that the adjustments are legally unsustainable and can be effectively defended based on the facts of the case.
"Based on the assessment and advice of the learned counsel, ZHL does not expect the said intimation to have any material financial impact as the abovementioned adjustments are not sustainable in law and are wholly defendable on the facts of the case," the drugmaker said.
Despite the significant financial figure involved, ZHL anticipates no material impact on its financial standing, operations, or other activities. The pharmaceutical company remains committed to resolving the matter through the appropriate legal channels and securing a rectification order that would negate the entire demand.
Shares of Zydus Lifesciences Ltd ended at ₹676.15, down by ₹3.80, or 0.56%, on the BSE.
