CBDT order on Satyam won't take effect for 2 weeks: SC

The apex court's direction came on an application filed by Mahindra Satyam seeking a clarification on an order passed by the apex court in the matter on April 15 this year.

The Supreme Court today said the CBDT order, as and when it is passed, on Mahindra Satyam tax dispute case would not take effect for two weeks so that the IT company may challenge it in an appropriate forum.

"In the continuation of our order dated April 15, 2011, we make it clear that the order of CBDT in the matter of Satyam would not take effect, so that it move any appropriate forum," a three-judge bench headed by the Chief Justice said.

The apex court's direction came on an application filed by Mahindra Satyam (earlier Satyam Computer) seeking a clarification on an order passed by the apex court in the matter on April 15 this year.

 

The order comes as a breather for Mahindra Satyam as it has furnished a bank guarantee of Rs 617 crore to the government on the apex court's direction for its accounts to become functional. The guarantee may be encashed immediately if the order is not in favour of the company.

The CBDT had frozen the bank accounts of Mahindra Satyam. It had served notice for 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.

The matter was, however, brought before the apex court, which passed an order on April 15 and asked the IT firm to file a petition before the CBDT for requantify its tax liability. It had also asked Mahindra Satyam to furnish a bank guarantee of Rs 617 crore within 48 hours to defreeze its bank accounts.

The court had also fixed a time-frame of two weeks for CBDT to fix the income tax liability of the company and pass a "reasoned order".

"Within two weeks the petitioner company [Mahindra Satyam] would file a comprehensive petition making its representation before CBDT giving all requisite information for re-assessment of income for year 2003-2004 to 2008-09," the bench said.

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