The Income Tax department has frozen Cognizant Technology Solutions Corp’s bank accounts and deposits in Chennai and Mumbai for allegedly evading a dividend distribution tax (DDT), according to a report on Tuesday.
A Cognizant spokesperson confirmed the report and said in a statement that a court has instructed the tax department not to take further action pending further hearings.
Cognizant failed to pay the tax of more than 25 billion rupees ($385 million) in the 2016-17 financial year, the Hindu newspaper reported, citing officials from the tax department.
Cognizant said it had paid all applicable taxes due on the transaction.
The company’s accounts were frozen a week back and it had approached the high court against the tax department, according to the report.
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“Cognizant’s business operations, our associates and our work with clients are not impacted by actions recently attempted by the Indian Income Tax Department,” the company said.
{{/usCountry}}“Cognizant’s business operations, our associates and our work with clients are not impacted by actions recently attempted by the Indian Income Tax Department,” the company said.
{{/usCountry}}A Cognizant spokesperson declined to give more details, while tax department officials could not be reached for comment outside regular business hours.
The US-listed IT services has significant operations in India where the majority of its 260,000 employees reside.