Dismissing the petition the Court held that section 115-O had been issued to the assessee and it had been given sufficient opportunity to be heard. Prima facie the buy-back of shares pursuant to the order of the company court would not give rise to capital gains and had to be treated as dividend. The assessee had an alternate remedy of filing an appeal against the order. A writ would not issue to quash the order. (WPNo. 7354 of 2018 dt 25 -06 -2018 (SJ)
Cognizant Technology Solutions India P. Ltd. v. DCIT, LTU (2019) 416 ITR 462 / 255 Taxman 100 (Mag.) / 181 DTR 382/ 310 CTR 527(Mad.)(HC) Editorial : Order of single judge is partly affirmed ; Cognizant Technology Solutions India (P) Ltd .v. DCIT (2019) 418 ITR 576 / 310 CTR 515 / 181 DTR 371 (Mad)(HC)
S. 115O : Domestic companies-Tax on distributed profits–Charging section–No need for issuance of notice before making a demand– Profits distributed to share holders is deemed to be dividend- Reduction on share capital can be effected by buying back shares –Advance Ruling cannot be given if an enquiry is pending against the assessee-Writ will not normally be issued if there is alternative remedy. [S. 2(22), 245R, Art.226]