Sasken Technologies tax liability falls after ITAT order
Sasken Technologies announced a reduction in its contingent liability following an order from the Income Tax Appellate Tribunal (ITAT) Bengaluru. The order, received by the company on July 1, 2026, addresses appeals for Assessment Years 2017-18 and 2020-21. The tribunal's decision is expected to lower the company's financial exposure by approximately ₹5.08 crore, comprising ₹4.50 crore for AY 2017-18 and ₹0.58 crore for AY 2020-21. The company anticipates receiving refunds for the corresponding amounts from the Income-tax Department.
*this image is generated using AI for illustrative purposes only.
Sasken Technologies announced a reduction in its contingent liability following an order from the Income Tax Appellate Tribunal (ITAT) Bengaluru. The order, received by the company on July 1, 2026, addresses appeals for Assessment Years 2017-18 and 2020-21. The tribunal's decision is expected to lower the company's financial exposure by approximately ₹5.08 crore, comprising ₹4.50 crore for AY 2017-18 and ₹0.58 crore for AY 2020-21. The company anticipates receiving refunds for the corresponding amounts from the Income-tax Department.
The ITAT ruled that no Tax Deducted at Source (TDS) was applicable on payments made by the overseas branches of Sasken Technologies. Consequently, the tribunal deleted the disallowances previously made under Sections 14A and 80G of the Income-tax Act. However, the tribunal sustained the disallowance of a specific payment amounting to ₹7 lakh that was made to a resident of the United Kingdom.
The order pertains to ITA Nos. 2057 and 2058/Bang/2025. The resolution of these tax disputes marks a favourable outcome for the company, directly impacting its financial statements by reducing the provisions set aside for these litigations.
Details of the ITAT Order
The following table outlines the key details of the event and the financial impact as disclosed by the company:
| S. No. | Details of events | Information of such event(s) |
|---|---|---|
| 1. | Name of the authority | ITAT Bangalore |
| 2. | Nature and details of the action(s) taken or order(s) passed | Order for the appeals ITA Nos. 2057 & 2058/Bang/2025 for AY 2017-18 & AY 2020-21 |
| 3. | Date of receipt of direction or order | Received by the Company on July 1, 2026. |
| 4. | Details of violation(s) / contravention(s) committed or alleged to be committed | The ITAT held that no TDS was applicable on payments made by the overseas branches and deleted the disallowances under Sections 14A and 80G. However, the ITAT sustained the disallowance of a payment of ₹7 lakh made to a UK resident. |
| 5. | Impact on financial, operation or other activities | As a result, the Company's contingent liability will reduce by approximately ₹4.50 crore for AY 2017-18 and ₹0.58 crore for AY 2020-21. We expect to receive a refund of the corresponding amounts from the Income-tax Department. |
The disclosure was made to the National Stock Exchange of India Limited and BSE Limited pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Historical Stock Returns for Sasken Technologies
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.03% | -6.95% | -10.46% | +35.50% | +43.70% | +71.72% |
How will the reduction in contingent liability and expected refunds influence Sasken's capital allocation strategy or dividend policy in the upcoming fiscal year?
Does the ITAT ruling on TDS applicability for overseas branches set a precedent that could impact other pending or future tax litigations for the company?
What is the expected timeline for receiving the refunds from the Income-tax Department, and how will the cash inflow affect liquidity in the short term?
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