CBDT told to assess Satyam’s tax liability again

CBDT told to assess Satyam’s tax liability again

New Delhi: Satyam Computer Services Ltd will be re-evaluated for its tax liability for the years 2003-04 to 2008-09 by the Central Bureau of Direct Taxes (CBDT) within four weeks, after the company agreed to withdraw its petitions before the Supreme Court and the Andhra Pradesh high court.

The dispute between the tax department and Satyam surrounds the fictitious income and interest that former chairman B. Ramalinga Raju inserted into the company’s balance sheet. Raju also paid taxes on this fictitious income, something the Serious Fraud Investigation Office (SFIO) and the Central Bureau of Investigation (CBI) have held Raju and the other formers managers liable for.

The court also directed the chairman of Satyam to furnish a bank guarantee for Rs617 crores on or before 25 April, after which the attachment of the company’s properties by authorities, including freezing its bank account, will come to an end.

The court directed CBDT to allow Satyam to make a fresh written representation before it, give the company an oral hearing and also record reasons while passing any orders in the case.

Last year, the income tax department had served a notice to Mahindra Satyam, demanding an audit of its accounts for the assessment years 2003-04 to 2008-09 as the company was found guilty of illegally claiming tax credit on fictitious income during the period.

Satyam computer Services, which was hit my a multi-crore fraud committed its owner Ramalinga Raju, was taken over by the Mahindra group in 2009 and rechristened as Mahindra Satyam.

PTI also contributed to this story