Mahindra Satyam challenges tax claim

Mar 23 2011, 09:02 IST
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SummaryI-T dept freezes firm’s accounts; firm says SFIO, CBI stated excess tax was paid.

Mahindra Satyam, formerly Satyam Computer Services Ltd, has moved Andhra Pradesh High Court challenging the Rs 616.53 crore claim by the Income-Tax Department and has sought a stay on further proceedings by the I-T department. On the other hand, the I-T department on Tuesday froze the bank accounts of Mahindra Satyam as the latter failed to pay up the tax.

Satyam said that the Central Board of Direct Taxes rejected various petitions it filed seeking reliefs for re-opening of past assessments for 2003-04 to 2008-09, determining the actual income based on the findings of investigating agencies, and granting stay of recovery proceedings for the said assessment years.

The company described the move as “unfair” and claimed that the income Tax Department had arrived upon the tax amount based on “fictional’’ income generated during Ramalinga Raju’s time.

“The company filed a writ petition before the High Court of Andhra Pradesh, Hyderabad challenging the said impugned order and seeking stay of further proceedings,” it said in a notice to the stock exchanges. “Notice under Section 226(3) has been issued by the Additional Commissioner of Income Tax, Hyderabad, for recovery of Rs 616.53 crore.

The company filed a writ petition before the Honorable High Court of Andhra Pradesh, Hyderabad, challenging the said impugned order and seeking stay of further proceedings,” the company said.

Mahindra Satyam chairman Vineet Nayyar said, “two agencies had said that Satyam paid excess taxes which should be refunded, but I-T insists on charging us taxes on the basis of forged accounts.”

SFIO (Serious Fraud Investigation Office) has stated that Satyam paid taxes in excess of Rs 200 crore, which is due to the company. The CBI even charged Raju for causing loss to the company by paying more tax than required, he said.

The I-T Department had last year served a notice to Mahindra Satyam, demanding for an audit of its accounts for the assessment years as the company was found guilty for illegally claiming tax credit on fictitious income between 2003-04 to 2008-09 period. This was the start and the end years that mark the period during which founder Ramalinga Raju had fudged the accounts of the country’s third largest software exporter.

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