Indian pharmaceutical major Zydus Life revealed that its wholly-owned subsidiary, Zydus Healthcare Limited (ZHL), has received an Income Tax demand of Rs 284.58 crore. The demand, communicated under section 143(1) of the IT Act for the assessment year 2023-2024, originates from the CPC, Income Tax Department.
Zydus Life reported in an exchange filing on December 26 that the tax intimation was issued due to apparent errors during the processing of ZHL's return of income. The identified mistakes include the disallowance of claims for deductions under sections 80-IE and 80-JJAA of the IT Act without a basis and the inadequate credit of taxes deducted/paid.
In response to the tax demand, Zydus Healthcare Limited, with the guidance of legal counsel, anticipates no significant financial impact. The company asserts that the adjustments outlined in the intimation are not legally sustainable and are entirely defensible based on the facts of the case.
ZHL has expressed disagreement with the demand on the e-filing portal of the Income Tax Department and is taking further actions. The company plans to file a Rectification Application under section 154 of the IT Act, both before the CPC and the Jurisdictional Assessing Officer, challenging the intimation.
In a press statement, Zydus Healthcare Limited emphasized its confidence that, following the rectification process, the entire demand will be nullified. The company remains resolute in its position that the alleged discrepancies in the tax intimation can be successfully addressed through the legal avenues available.
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