TEANECK, N.J., APRIL 3, 2018 - Cognizant (Nasdaq: CTSH) today announced that the Madras High Court in Chennai, India, granted Cognizant’s application for a stay of the actions of the Indian Income TaxDepartment (ITD)and a lifting of the department’s attachment of Cognizant’s bank accounts. As part of the stay order, Cognizant will deposit $75 million (INR 4.9 billion), representing 15% of the disputed tax, to be kept in a suspense account by the ITD, with the remainder marked under lien. The Court further granted the request of Cognizant to address the ITD’s collection actions and scheduled a hearing later in April 2018.

“Our operations remain unaffected,”said KarenMcLoughlin, Chief Financial Officer, Cognizant.  “This disputeis with respect to a lawful, fully reviewed and disclosed transaction, and weare pleased with today’s decision that restores appropriate due process. Cognizant is committed to complying with the law in all jurisdictions in whichwe operate, and we will continue our defense against the assertions of theIndian Income Tax Department in this and other tax disputes.” 

The underlying dispute involves the Indian Income TaxDepartment’s recent assertion that it is owed additional taxes in connectionwith a 2016 $2.8 billion share buyback transaction undertaken by Cognizant’sprincipal operating subsidiary in India.  In that transaction, undertakenpursuant to a plan approved by the Madras High Court, Cognizant paidapproximately $135 million (INR 9 billion) in Indian income taxes, which itbelieves are all applicable taxes owed according to Indian law.

  (0)   Comment