Government-appointed auditors Contractor Nayak and Kishnadwala had submitted a report on Bharti Airtel in March this year, which according to the company, had not found any wrong-doings in accounting practices.  “A VIP reference has been forwarded to this office regarding certain discrepancies in the accounts of Bharti Airtel pointed out by the special auditor Contractor Nayak and Kishnadwala, led by managing partner Himanshu Kishnadwala, appointed by the DoT,” Additional Commissioner of Income Tax said in a communication to the DoT. The I-T Department said that a complete copy of the special audit report should be submitted to enable it to examine the same from the corporate tax/income tax angle.

“Please note that the income tax assessments of Bharti Airtel Limited for assessment years 2007-08 and 2008-09 are pending and same are time-barring proceedings as per provisions of the I-T Act. Therefore, it is requested that the copy of special audit report referred may be forwarded immediately,” Additional Commissioner of Income Tax said. As per initial response of DoT, the report had found no fraud, though it had talked of some irregularities as being prevalent in the industry. The audit report had also raised certain revenue-specific queries involving an amount of about Rs 100 crore, while giving virtually a clean chit to the accounts of the multi-billion dollar company.

“The special audit of Bharti Airtel's accounts commissioned by the Department of Telecom has not found any irregularity in the company's books or loss of revenue fee to the government on account of licence fee,” the company's top official, Manoj Kohli, had said.