The Satyam ghost continues to haunt Mahindra Satyam. The Income-Tax Department has asked the new management to pay Rs 2,114 crore for the assessment years 2002-03 and 2007-08 when Mr B. Ramalinga Raju, the founder Chairman of Satyam Computer Services, allegedly perpetrated the financial fraud.
The company acknowledged receipt of a draft of the proposed assessment orders together with draft notices of demand for Rs 1,037.69 crore and Rs 1,075.73 crore for 2002-03 and 2007- 08 respectively. The draft disallowed tax exemptions or deductions the company claimed.
“However, it does not exclude fictitious income wrongly offered to tax by the earlier management. The existence of fictitious sales and fictitious interest has even been confirmed by other Government of India agencies,” the company informed the Bombay Stock Exchange on Monday.
“It is only a draft and notice. We are going to contest this,” a top company executive told
The company is carrying Rs 405 crore (net of payments) towards provision for taxation. For the quarter ended June 30, 2011, it paid taxes of Rs 42.55 crore and Rs 58 crore for 2010-11.
The company is fighting a legal battle with the I-T Department over taxing the company for the questionable years where the erstwhile management resorted to widespread financial irregularities that included inflating sales figures.
Under the directions of the Supreme Court, the company deposited a bank guarantee of Rs 617 crore to the Department against its notice for the same amount for questionable years early this year.
The company also challenged in the Andhra Pradesh High Court the Department's decision to call for a special audit of accounts during 2001-07.