- Tax, Legal & Accounting
- 1 min read
Cognizant gets HC relief in I-T Dept's Rs 9,400 cr tax demand case
The Madras High Court has stayed the Income Tax Department's demand of ₹9,403.09 crore from Cognizant Technologies for its share buyback of over ₹19,000 crore in 2017-18. The court has directed Cognizant to pay ₹1,500 crore within four weeks as security against the tax demand. If the company fails to comply, the stay order will be vacated automatically.The Madras High Court has stayed the Income Tax Department's demand of ₹9,403.09 crore in tax from Cognizant Technologies in connection with the IT firm's share buyback of more than ₹19,000 crore in 2017-18.
However, the court has directed Cognizant to make a payment of ₹1,500 crore to the department within four weeks, as security against the tax demand while it decides whether the company was liable to pay dividend distribution tax on the buyback expenses.
A bench of Justice Mohammed Shaffiq and Justice R Mahadevan, in its order last week, said if the company failed in complying with the condition, the stay order shall stand vacated automatically and the tax department could "recover the tax liability from the appellant in the manner known to law".
It also argued that the financial difficulty cited on the part of the company had no merit, as it had assets of around ₹21,644 crore as on March 31, 2022.
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