Rs 2,912 cr tax dispute: Cognizant’s plea dismissed

Justice K Kalyanasundaram while dismissing the plea said, “The Supreme Court and various High Courts have held that the assessee has an appeal remedy under Section 246 of the act. In this case, an unsuccessful attempt has been made by CTS to bypass the appeal remedy, but I find no valid ground to entertain the writ petition.”

The judge also set aside the contention of the CTS’s counsel that India needs Foreign Direct Investment (FDI) for developmental activities and if they are harassed by the officials by making unreasonable demand, it would seriously affect the FDI. He said, “Such a situation does not arise here, and I find no such harassment in the matter on hand.”

“For the foregoing reasons, the writ petition fails and the same is dismissed. However, liberty is given to CTS to prefer an appeal within four weeks from Tuesday. If such an appeal is filed within the stipulated time, the Appellate Authority shall dispose of the same on merits, after providing opportunity of hearing to CTS. It is needless to mention that the above observations have been made only to reach a prima facie conclusion,” Justice Kalyanasundaram said.

The order passed was based on a plea moved by CTS assailing the order by the Deputy Commissioner of Income Tax on March 22, 2018, whereby it was directed to remit tax at 15 per cent of the total payment of Rs 19,415 crore along with interest under Section 115P of the I-T Act. But the I-T Department contended that the company had framed a scheme for buyback because the number of shares was more than the limit allowed under Section 77A of the Companies Act of 1956 and hence the company should have paid tax at the rate of 20 per cent.