New Delhi: The tax department is considering a special audit of the accounts of scam-ridden Satyam Computer Services Ltd to ascertain the tax liability of the IT firm.
“We are considering a special audit of the books of Satyam. An order for special audit of the accounts of Satyam is likely to be passed within a week,” a tax official said.
The income-tax department can order a special audit of the accounts under Section 142 (A) of the Income-tax Act in the interest of revenue. Under the special audit, the books of accounts are re-examined by the auditors appointed by the department.
Accounting problems: The Satyam office in Hyderabad. Bharath Sai / Mint
When contacted, the Central Board of Direct Taxes (CBDT) spokesperson declined to comment on the issue.
“Special audit for Satyam is the only viable option”, said Aseem Chawla, Partner of Amarchand Mangaldas, the law firm which was engaged by the government-nominated board of Satyam to facilitate acquisition of the company.
According to Chawla, the special audit of the firm to ascertain its actual tax liability was necessary in view of the admission of fudging of accounts.
Satyam plunged into a crisis in January after its founder B. Ramalinga Raju revealed an accounting scam of Rs7,136 crore.
Although the new Satyam board had appointed global auditing firms KPMG and Deloitte to restate the books of accounts, it would be difficult for the department to accept the report of these auditors as they were not appointed by the authorities.
Meanwhile, Tech Mahindra will have its first official interaction with the Satyam board on Monday.
Satyam directors and senior Tech Mahindra officials will take part in the meeting in Hyderabad.