Tech Mahindra’s IT reassessment plea: HC questions CBDT\'s rejection

HYDERABAD: The Telangana High Court on Wednesday questioned Central Board of Direct Taxes (CBDT) whether a departmental wing of the government can retain fictitious tax amounts.

The division bench, comprising Chief Justice Ujjal Bhuyan and Justice N. Tukaramji, was hearing a batch of petitions filed in 2013 by Tech Mahindra (formerly Satyam computers Ltd) challenging the actions of the Income Tax department which refused to accept the revised returns filed for those years where the former chairman of Satyam Ramalinga Raju had inflated the revenue and paid taxes on fictitious income between 2003 and 2009. When the scam broke out, CBI and serious fraud investigation office (SFIO) conducted an investigation and found that claims of income generated in those years were false. Around Rs 126 crore was paid as income tax on the fictitious amounts. When Tech Mahindra Company, which took over Satyam computers, urged CBDT to reassess the accounts, the board rejected the plea.

On behalf of the petitioner, senior counsel Arvind Datar argued that Satyam was bought by Tech Mahindra after great effort by the then Union government and on paying Rs 3,000 crore towards acquisition.