The Madras High Court today 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."
Justice TS Sivagnanam, before whom the plea came up today, 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."
"Similarly the attachment of nine bank deposits shall also continue subject to the lien being created for remaining amount of taxes."
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