LIVE TV DownloadNews18 App
News18 English
2-min read

HC Directs Cognizant to Pay 15% of Rs 2,800 Crore Tax Demand

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.


Updated:April 4, 2018, 8:15 AM IST
HC Directs Cognizant to Pay 15% of Rs 2,800 Crore Tax Demand
Representative Image. ((Image: Cognizant)
Chennai: The Madras High Court on Tuesday 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 tech giant's comments follow the department freezing its certain bank accounts in the country over a dispute on payment of dividend distribution tax (DDT) running into hundreds of crores.

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.

However, the attachment in respect of other banks - SBI, Deutsche Bank, Corporation bank and
HDFC bank - shall continue "till the compliance of the direction", the judge said.

"Similarly the attachment of nine bank deposits shall also continue subject to the lien being created for remaining amount of taxes."

"The remittance of 15 per cent of the tax demanded shall be retained in a separate account and
shall abide by the order to be passed in writ petition," the judge said and posted the case for further hearing to April 18.

The allegation against Cognizant is that it has remitted about Rs 19,415 crore to its non-resident shareholders in May 2016 without paying any DDT.

The issue of non-payment was identified and a notice sent by the I-T department last November calling for details of the tax paid on these remittances.

Catch the Biggest Newsmakers and the Biggest Newsbreaks on CNN-News18, your favourite English TV news channel. Keep watching CNN-News18 at just 50 Paise per Month. Contact your cable /DTH operator Now!
*Rental / capacity fee of Rs.130/- as charged by cable / DTH operator may apply. **GST extra.

| Edited by: Ahona Sengupta
Read full article
Next Story
Next Story

Also Watch

Most Active
Company Price Change %Gain
Yes Bank 219.00 -1.02
Dr Reddys Labs 2,563.35 -3.90
Reliance 1,244.45 1.65
ITC 280.10 0.79
Axis Bank 686.60 -1.21
Company Price Change %Gain
Yes Bank 218.70 -1.04
Dr Reddys Labs 2,556.90 -4.21
Reliance 1,243.50 1.47
Jet Airways 232.55 2.99
GRUH Finance 239.30 -3.22
Top Gainers
Company Price Change %Gain
BPCL 327.85 3.87
NTPC 136.25 3.81
Power Grid Corp 181.50 3.74
Bharti Infratel 306.90 3.26
GAIL 317.75 3.18
Company Price Change %Gain
NTPC 136.20 4.13
Power Grid Corp 181.50 3.80
ONGC 135.10 2.27
Reliance 1,243.50 1.47
Larsen 1,243.25 1.31
Top Losers
Company Price Change %Gain
JSW Steel 266.90 -4.90
Sun Pharma 422.90 -4.08
Dr Reddys Labs 2,563.35 -3.90
Tata Steel 467.50 -3.12
Vedanta 147.30 -2.93
Company Price Change %Gain
Sun Pharma 423.30 -3.94
Tata Steel 467.45 -3.12
Vedanta 147.45 -2.87
Hero Motocorp 2,702.30 -2.75
Bajaj Finance 2,557.50 -1.90

Live TV

Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results