Court bars I-T dept and Satyam to operate company's account

Court bars I-T dept and Satyam to operate company's account

The matter has been posted to March 30 for next hearing.
The interim order was passed by the Divisional bench of AP High Court, comprising Justices V V S Rao and Ramesh Ranganathan.

Mahindra Satyam has challenged the demand notice of the Central Board of Direct Taxes (CBDT).

In a big set-back for the new brand identity of Satyam Computers, which was hit by the country's biggest accounting fraud and was eventually bought over by Mahindras, the tax authorities on Tuesday slapped a Rs 616,53,92,660 demand notice on the company.

Mahindra Satyam also apprehended that the authorities could freeze the company's accounts.

However, G Ganeshan, senior counsel Mahindra Satyam, argued that the CBDT notice was arbitrary, illegal and on abdication of power and duty.

Besides, he said that there was no justification in attaching the company’s bank accounts whose total value is Rs 1,300 crore.

Meanwhile, the bench has directed the company to submit a written undertaking to the court that the accounts will not be operated till March 31.

After the confession of a multi-crore accounting fraud by its founder B Ramalinga Raju in 2009, Satyam Computers plunged into a financial crisis. The matter is now being prosecuted by Indian investigative agencies.

Mahindra Satyam Chairman Vineet Nayyar, said earlier that CBDT turned down the company’s requests not to impose the tax on the grounds that the calculations are based on the accounts of the previous management and have proved to be fictitious.