Indian staffing services firm Quess Corp has denied concealing any income after the Income  Tax Department claimed that it has revealed undisclosed income of around INR 8.80 billion (USD 11.8 million) during raids of the company's two premises in Bengaluru, according to the Business Standard.

Quess Corp has said that the Income Tax Department conducted a survey under Sec 133A of the Income Tax Act, 1961 at its Registered Office, and at that of its subsidiary Terrier Security Services, during 8 to 10 July 2021.

Lohit Bhatia, as well as being President - Workforce Management of Quess Corp is also President of the Indian Staffing Federation so the tax dispute could have wider ramifications.

According to the Economic Times, the government provides tax breaks under Section 80 JAA of the Income Tax Act to employers adding new jobs with a monthly salary cap of INR 25,000 (USD 335.44), subject to certain conditions.

India’s Central Board of Direct Taxes, issued a statement to the Financial Express, ““The assessee has been claiming huge deduction under section 80JJAA of the Income-tax Act, 1961 which incentivises new employment generation, subject to fulfilment of certain conditions such as emoluments paid to the employee which should be less than INR 25,000 (USD 335.44) per month and number of days of employment etc.”

Quess Corp said it has been a 100% compliant tax payer.

Saying that its claims under section 80JJAA are entirely in line with the letter, spirit and intent of the law, and aligned with prevailing industry practices, the staffing firm added: "We further refute any allegations of 'concealment' of income. The queries raised to date by the Income Tax department are interpretational in nature.”

Quess added that it will continue to cooperate with the department even as it stands committed to "vigorously defending" its interpretation using all recourse available.

Quess Corp said it paid a total of INR 29 billion (USD 389.04 million) in tax and statutory contributions to the government in financial year 2021, ‘which represents 12 times the company’s normalised profit for the year, or 26% of its revenue,’ it said. The company said it maintains a scrupulous record of its financial dealings, and contributes towards nation-building as a responsible business.

According to SIA’s Largest Staffing Firms in India report published in February 2021, Quess is the market leader with 32 offices nationwide.

Shares in Quess Corp closed yesterday at INR 758.95, down 5.7% on the day. The company has a market cap of INR 109.77 billion.