Bar & Bench News Network
The problem for Mahindra Satyam management is far from over. The Andhra Pradesh High Court has ordered both Mahindra Satyam and the Income Tax department to restrain from accessing the bank accounts in Hyderabad till a final order is passed. The interim order was passed by the Divisional bench, comprising Justices V.V.S. Rao and Ramesh Ranganathan.
The IT Department had on March 22, frozen the bank accounts of Mahindra Satyam after the latter failed to pay a tax demand of Rs. 617 crore. Mahindra Satyam moved the AP High Court seeking a stay challenging the demand notice of Central Board of Direct Taxes (CBDT).
The demand for tax has been raised on the basis of the income declared by the company during disgraced former chief Ramalinga Raju’s time i.e. from 2002-08. The present management believes that this income is forged.
The IT department has refused to agree that Satyam had fictitious income and instead insisted that it was real income. The IT department is not willing to accept the restated account because as per the Income Tax Act, 1961 financial documents once made and approved by the AGM cannot be altered after a year.
Senior Counsel who specializes in income tax litigation, S. Ganesh appearing for Mahindra Satyam argued that when the disputed tax liability is about Rs. 617 crore, the garnishee orders issued to various banks, where the aggregate deposits stand at Rs. 1300 crore are arbitrary and illegal. Mahindra Satyam’s lawyer Vivek Reddy assisted Senior Counsel S. Ganesh.
IT department lawyer J.V. Prasad opposed any interim orders being passed at this stage.Meanwhile, the Court has directed the company to submit a written undertaking to the Court that the accounts will not be operated till March 31.
Vineet Nayyar, Chairman of Mahindra Satyam speaking to ET said “Foreign tax credit is irrelevant if you do not have income. We feel this claim is not fair because Raju had fabricated huge revenues. Government investigating agencies, including the CBI and the SFIO had said Mahindra Satyam paid tax on this fictional income, which is more than required”.
The main issue here is that since the accounts were fudged earlier so how is it possible to pay taxes for unreal income.
The matter is now listed on March 30.
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- 1. "Contrary to what shareholders of major corporations are told, the call centers in India border on fraud. Now it appears the customers are not the only ones being scammed.What floors me is how major corporations have lowered the value of their products by outsourcing customer service to this organization.Why? To show shareholders and directors higher gross margins (they get a larger bonus?). Have any of these stakeholders attempted to anonymously call in as a customer? If they have, and been complacent proves the recklessness played with the value of their products and company.As a system integrator, our service staff, customers and end users occasionally end up routed to customer service or support courtesy of Satyam Mahindra, who usually observe the following procedures:1) Send your call to the back of the queue at least once.2) Can barely understand the caller, not because of the accents, but the insufficient bandwidth to their call centers.3) Put you on hold for 5 - 15 minutes several times to speak to a supervisor or support in North America.4) Pass you to a call center in Manila or Costa Rica5) Eventually pass you on to or coordinate North American service staff to your help resolve your issue. 6) Incorrectly answer your questions7) Hang up on you.". Arvin Ewing, TORONTO, ON
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The Viewpoint: Indemnification Provisions - Is the fight on the indemnity clause worth the effort?
May 17, 2012 | Bar & Bench brings to you the twentieth article on 'The Viewpoint' series with its Knowledge Partner AZB & Partners. AZB Senior Associate Nandish Vyas and Associate Pranati Ishwar in this article seek to examine the context in which indemnification rights are relevant for acquisition transactions, and also seek to explore if there are areas where they are potentially not worth the comments (2)
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