• Corporate & Business
• 2 min read

NCLT approves Cigniti-Coforge amalgamation; preserves IT department's GAAR rights

The order was delivered on April 29, 2026, by Judicial member Khetrabasi Biswal and technical member Shishir Agarwal.

• ETLegalWorld

• Published On May 1, 2026 at 06:29 PM IST

The National Company Law Tribunal (NCLT), Chandigarh Bench, has sanctioned the Scheme of Amalgamation of Cigniti Technologies Limited with and into Coforge Limited under Sections 230 to 232 of the Companies Act, 2013, declaring that Cigniti "shall stand dissolved without winding up upon the Scheme becoming effective."

The order was delivered on April 29, 2026, by Judicial member Khetrabasi Biswal and technical member Shishir Agarwal.

Income Tax Department's Objections, and the GAAR Reservation

The income tax department flagged outstanding tax demands of INR 28,63,99,207 against Cigniti across multiple AYs and INR 3,04,77,45,392 against Coforge, and formally "reserved its right to invoke the General Anti-Avoidance Rules ('GAAR') and to determine the tax implications of the Amalgamation independently of the Scheme."

Advt The Tribunal has expressly preserved these rights in its operative directions, holding that "if it is found that the Scheme of Amalgamation ultimately results in tax avoidance or is not in accordance with the applicable provisions of the Income Tax Act, 1961, including the provisions relating to GAAR, then the Income Tax Department shall be at liberty to initiate appropriate course of action in accordance with the law."

Coforge made binding commitments before the bench that it shall "take over and discharge all tax liabilities of the Transferor Company, whether pending, completed, or likely to arise," and that all pending assessments and proceedings of Cigniti shall continue in Coforge's hands under Section 170 of the Income Tax Act, 1961.

Share Exchange Ratio

The Registrar of Companies, Haryana, had raised a substantive objection on the shift in swap ratio from the originally recommended 1:5 to the revised 1:1, seeking a "detailed explanation for this apparent discrepancy."

The Tribunal accepted the companies' explanation that the revision was a purely mathematical adjustment consequent to Coforge's stock split of March 4, 2025, confirmed by the registered valuers and merchant bankers JM Financial Limited and Axis Capital Limited.

Key Directions

The NCLT's order mandates Coforge to file Form INC-28 with the Registrar of Companies, Haryana, within 30 days, after which the RoC shall proceed to strike off Cigniti's name from the Register of Companies.

New Coforge shares issued to Cigniti shareholders "shall remain frozen in the depository system until the Stock Exchanges grant listing and trading permission." The Appointed Date of the Scheme is April 1, 2025.

Advt