Bank accounts frozen but operations not impacted: Cognizant

The Income Tax Department has frozen bank accounts of software services company Cognizant for alleged evasion of Dividend Distribution Tax (DDT) but the firm said on Tuesday that its operations of the company were not affected by the action.

A company official also said that the Madras High Court had instructed the tax department not to take further action pending further hearings.

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According to Cognizant, it has paid all applicable taxes.

The dispute pertains to Cognizant Technology Solutions India (P) Ltd buying its own shares from shareholders – two companies, one based in Mauritius and the other in US – in 2016 under a scheme of arrangement and compromise.