HC refuses to stop tax recovery action against tech giant
TIMES NEWS NETWORK
Chennai:07.09.2019
The Madras high court on Friday upheld an order dismissing a plea moved by information technology major Cognizant, challenging the recovery proceedings initiated by the income tax department for non-payment of ₹2,912.25 crore dividend distribution tax (DDT).
A division bench of Justice M M Sundresh and Justice M Nirmal Kumar also confirmed the interim order directing the company to deposit ₹490 crore, 15% of the total tax demand to be kept in a suspense account by the department pending disposal of appeal to be moved by the company before the appellate authority.
“We do not find any error in the order of the single judge with respect to the deposit made during the pendency of the interim order as erroneous. It is only an interim arrangement directed to be made pending the appeal,” the bench said.
The court, however, set aside the findings of the single judge on the nature of transaction and the scope under Section 115-O of the Income Tax Act.
The issue as to whether the tax demand order should be preceded by a procedure involving adjudication and the requirement of violation of principles of natural justice are also left open to be decided in the appeal, the bench added.
The issue pertains to the order passed by a single judge of the court dated June 25 dismissing the plea moved by Cognizant challenging the tax demand for remitting ₹19,415 crore to its nonresident shareholders in the US and Mauritius towards buyback of 94,00,543 of its equity shares in May 2016.
The dismissal was passed on the ground that the company has not exhausted all other available legal remedies before approaching the high court. Aggrieved, the company has moved the present appeal.
The court dismissed a plea moved by software giant Cognizant challenging action initiated by I-T department over ₹2,912 crore of unpaid tax
TIMES NEWS NETWORK
Chennai:07.09.2019
The Madras high court on Friday upheld an order dismissing a plea moved by information technology major Cognizant, challenging the recovery proceedings initiated by the income tax department for non-payment of ₹2,912.25 crore dividend distribution tax (DDT).
A division bench of Justice M M Sundresh and Justice M Nirmal Kumar also confirmed the interim order directing the company to deposit ₹490 crore, 15% of the total tax demand to be kept in a suspense account by the department pending disposal of appeal to be moved by the company before the appellate authority.
“We do not find any error in the order of the single judge with respect to the deposit made during the pendency of the interim order as erroneous. It is only an interim arrangement directed to be made pending the appeal,” the bench said.
The court, however, set aside the findings of the single judge on the nature of transaction and the scope under Section 115-O of the Income Tax Act.
The issue as to whether the tax demand order should be preceded by a procedure involving adjudication and the requirement of violation of principles of natural justice are also left open to be decided in the appeal, the bench added.
The issue pertains to the order passed by a single judge of the court dated June 25 dismissing the plea moved by Cognizant challenging the tax demand for remitting ₹19,415 crore to its nonresident shareholders in the US and Mauritius towards buyback of 94,00,543 of its equity shares in May 2016.
The dismissal was passed on the ground that the company has not exhausted all other available legal remedies before approaching the high court. Aggrieved, the company has moved the present appeal.
The court dismissed a plea moved by software giant Cognizant challenging action initiated by I-T department over ₹2,912 crore of unpaid tax
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