The Madras High Court on Tuesday April 03,2018 granted interim stay on Income Tax
department proceedings against Cognizant, subject to the firm depositing
15 per cent of Rs 2,800 crore dividend distribution tax demanded by the
department.
The company has filed a plea in the court seeking stay of recovery proceedings as the I-T department had frozen some of its bank accounts.
The US-based IT firm has said it paid all applicable taxes related to its buy-back transaction in 2016 and the Income Tax department's position is "contrary to law and without merit."
The tax issue pertains to unpaid dues around share purchases done by its subsidiary, Cognizant Technology Solutions India, which had bought back shares from foreign owners -- Cognizant Mauritius and the US-based parent Cognizant Technology Solutions (CTS).
Justice TS Sivagnanam, before whom the plea came up on Tuesday, said, "There shall be an order of interim stay of impugned proceedings subject to the condition that the petitioner pays 15 per cent of the tax demanded and furnishes a bank guarantee or security by way of fixed deposit for the remaining taxes demanded."
"For the proper compliance to the above condition, the attachment of (company) bank account with J.P Morgan Chase Bank, Mumbai shall stand lifted forthwith," the judge said.
The company has filed a plea in the court seeking stay of recovery proceedings as the I-T department had frozen some of its bank accounts.
The US-based IT firm has said it paid all applicable taxes related to its buy-back transaction in 2016 and the Income Tax department's position is "contrary to law and without merit."
The tax issue pertains to unpaid dues around share purchases done by its subsidiary, Cognizant Technology Solutions India, which had bought back shares from foreign owners -- Cognizant Mauritius and the US-based parent Cognizant Technology Solutions (CTS).
Justice TS Sivagnanam, before whom the plea came up on Tuesday, said, "There shall be an order of interim stay of impugned proceedings subject to the condition that the petitioner pays 15 per cent of the tax demanded and furnishes a bank guarantee or security by way of fixed deposit for the remaining taxes demanded."
"For the proper compliance to the above condition, the attachment of (company) bank account with J.P Morgan Chase Bank, Mumbai shall stand lifted forthwith," the judge said.
No comments:
Post a Comment