Interim relief for Cognizant in ₹2,500 cr. tax dispute case
HC asks AAR (I-T) to desist from passing final orders till disposal of writ appeals
10/08/2019, LEGAL CORRESPONDENT,CHENNAI
The Madras High Court on Friday restrained the Authority for Advance Rulings (Income Tax) in Mumbai from passing final orders with respect to alleged tax dispute to the tune of over ₹2,500 crore involving software major Cognizant Technology Solutions India Private Limited and its non- resident shareholders Cognizant (Mauritius) Limited and Cognizant Technology Solutions Corporation based in New Jersey.
Passing interim orders on writ appeals preferred by CTS India and Cognizant (Mauritius) challenging a single judge’s verdict, a Division Bench of Justices M.M. Sundresh and M. Nirmal Kumar said it would only be appropriate for the AAR (I-T) to desist from passing final orders on the issue until the disposal of the writ appeals.
The interim relief was granted at the instance of senior counsel Gopal Subramaniam representing CTS.
The appeals had been preferred against a judgment passed on June 25 by Justice K. Kalyanasundram, who held that writ petitions filed by CTS India and Cognizant (Mauritius) in 2018, challenging draft tax assessment, were not maintainable since there was an effective alternative remedy of filing statutory appeals before the authorities concerned.
He had granted liberty to the petitioners to approach the appellate authorities to get their grievances redressed.
However, assailing his order, the appellants claimed that they were entitled to invoke the writ jurisdiction of the High Court since it was their case that tax had been assessed on wrong presumption that the money paid to the foreign shareholders towards buyback of shares was actually payment of dividend.
Assessment orders
Asserting that CTS India had not paid any dividend to its shareholders, it was argued that the High Court could straightway set aside the assessment orders.
Even assuming that there existed an alternative remedy, that alone could not be cited as a reason to reject the writ petitions, they argued.
HC asks AAR (I-T) to desist from passing final orders till disposal of writ appeals
10/08/2019, LEGAL CORRESPONDENT,CHENNAI
The Madras High Court on Friday restrained the Authority for Advance Rulings (Income Tax) in Mumbai from passing final orders with respect to alleged tax dispute to the tune of over ₹2,500 crore involving software major Cognizant Technology Solutions India Private Limited and its non- resident shareholders Cognizant (Mauritius) Limited and Cognizant Technology Solutions Corporation based in New Jersey.
Passing interim orders on writ appeals preferred by CTS India and Cognizant (Mauritius) challenging a single judge’s verdict, a Division Bench of Justices M.M. Sundresh and M. Nirmal Kumar said it would only be appropriate for the AAR (I-T) to desist from passing final orders on the issue until the disposal of the writ appeals.
The interim relief was granted at the instance of senior counsel Gopal Subramaniam representing CTS.
The appeals had been preferred against a judgment passed on June 25 by Justice K. Kalyanasundram, who held that writ petitions filed by CTS India and Cognizant (Mauritius) in 2018, challenging draft tax assessment, were not maintainable since there was an effective alternative remedy of filing statutory appeals before the authorities concerned.
He had granted liberty to the petitioners to approach the appellate authorities to get their grievances redressed.
However, assailing his order, the appellants claimed that they were entitled to invoke the writ jurisdiction of the High Court since it was their case that tax had been assessed on wrong presumption that the money paid to the foreign shareholders towards buyback of shares was actually payment of dividend.
Assessment orders
Asserting that CTS India had not paid any dividend to its shareholders, it was argued that the High Court could straightway set aside the assessment orders.
Even assuming that there existed an alternative remedy, that alone could not be cited as a reason to reject the writ petitions, they argued.
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