M/S.cognizant Technology Solutions India Pvt. Ltd v. The Commissioner Of Income Tax, Larger Taxpayer Unit, 7Th Floor, Wanaparthy Block, Aayakar Bhawan, Nungambakkam, Chennai - 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved onDelivered on 05/04/2019 25/06/2019 CORAM: THE HONOURABLE MR. JUSTICE K.KALYANASUNDARAM W.P.No. 7542 of 2018 &W.M.P.No.9387 of 2018 M/s.Cognizant Technology Solutions India Pvt. Ltd.,No.165, Eternity Building,6th Floor, St. Mary's Road,Chennai - 600 018. .. PetitionerVs. The Commissioner of Income Tax,Larger Taxpayer Unit,7th Floor, Wanaparthy Block,Aayakar Bhawan,Nungambakkam, Chennai - 600 034. Nungambakkam, Chennai - 600 034. .. Respondent PRAYER: Writ Petition filed under Article 226 of theConstitution of India praying for issuance of a Writ ofCertiorari to call for records pertaining to F. No.Proceedings / CIT-LTU / CHE/2017-18, dated 21.03.2018 on thefile of the respondent herein and quash the same. * * * For Petitioner : Mr.Gopal Subramanium Senior Advocate For Mr.Srinath Sridevan For Respondent : Mr.G.Rajagopalan Additional Solicitor General Assisted by Mr.Karthik Ranganathan Senior Standing Counsel for Income Tax Department * * * The show-cause notice seeking explanation / reply as to whythe Assessment of AY-2014-2015 made under Section 143 (3) readwith Section 92 CA of the Income Tax Act, (in short "Act") dated31.12.2016, should not be treated as erroneous and prejudicialto the interest of the Revenue and consequently, set aside underSection 263 of the Act is challenged by the Cognizant TechnologySolutions India Pvt. Ltd., in this Writ Petition. 2. The facts necessary for disposal of this case would runthus:- The petitioner is a Company incorporated under theCompanies Act in the year 1994 and it is engaged in the businessof development of computer software and related services andexport. In the year 2013, the petitioner purchased its ownshares as buy-back under Section 77 A of the Companies Act atRs.23,915.10/- per share. The petitioner completed the buy-backof shares on 22.05.2013 and filed Income Tax Return on29.11.2014 for the Assessment Year 2014-15. The DeputyCommissioner of Income Tax, Large Taxpayer Unit-I, accepted theReturn filed by the petitioner and passed orders on 31.12.2016. 3. In the year 2017, notices were issued to thepetitioner's shareholders viz., Cognizant (Mauritius) Limitedand Cognizant Technology Solutions Corporation, United States,on the ground of over valuation of shares. The shareholders ofthe petitioner have challenged the Draft Assessment Orders inW.P.Nos.1244 & 1245 of 2018. 4. Mr.Gopal Subramanium, learned Senior Counsel appearingon behalf of the petitioner would contend that the Income TaxReturn of the petitioner was accepted after elaborate enquiry,but now it is sought to be reopened under Section 263 of the Actonly to defeat the stand taken by the petitioner's shareholdersin the Writ Petitions. It is the contention of the learnedSenior Counsel that the grounds raised in the Writ Petitions arethat the Income Tax Returns of the petitioner-Company wasaccepted and bifurcation of the share price into two parts iswithout authority of law and unless the issues are decided, theDepartment under the guise of exercising power under Section 263of the Act cannot issue the impugned notice. The sharespurchased under Section 77 A of the Companies Act cannot beregarded as dividend and the impugned notice has been issued ina hurried manner without providing sufficient time to thepetitioner to send a reply and hence, it is liable to be set-aside. 5. In reply, Mr.G.Rajagopalan, learned Additional SolicitorGeneral on behalf of the Revenue would argue that the order https://hcservices.ecourts.gov.in/hcservices/ impugned in this Writ Petition is only a show-cause notice andthe petitioner has not raised any valid ground to set-aside theorder and hence, the Writ Petition is liable to be dismissed. 5. In reply, Mr.G.Rajagopalan, learned Additional SolicitorGeneral on behalf of the Revenue would argue that the order https://hcservices.ecourts.gov.in/hcservices/ impugned in this Writ Petition is only a show-cause notice andthe petitioner has not raised any valid ground to set-aside theorder and hence, the Writ Petition is liable to be dismissed. 6. In view of the elaborate orders passed in W.P.Nos.1244& 1245 of 2018, touching all the issues, this Writ Petitionstands dismissed, directing the petitioner to file necessaryobjections to the show-cause notice within a period of 15 daysand on such receipt, the same shall be considered by meeting outeach and every objections raised, on merits and in accordancewith law. There is no order as to costs. Consequently, connectedmiscellaneous petition is closed. Sd/- Assistant Registrar(CS VII) r n sTo //True Copy// Sub Assistant Registrar The Commissioner of Income Tax,Larger Taxpayer Unit,7th Floor, Wanaparthy Block,Aayakar Bhawan,Nungambakkam, Chennai - 600 034. +1cc to Mr.Srinath Sridevan, Advocate, S.R.No.53011+1cc to Mr.Karthik Ranganathan, Advocate S.R.No.52032 RRS(27/06/2019) W.P.No. 7542 of 2018 &W.M.P.No.9387 of 2018