However, upon further inquiry it was found that the firm had already paid Rs 1.76 crore as service tax out of the total due amount of Rs 25 crore and was to pay the rest in following months, Prasar Bharti sources said.

The sources said that the letter was written about three to four weeks back and no further action was taken after an internal inquiry found that that they were on schedule in paying the service tax.

Asked for their reaction, SIS Live in a written reply said that the company had said that it has paid all service taxes due in accordance with the regulations; the last payment being made in October and the next payment is due in January 2011.

"SIS LIVE has kept proper accounts and copies of bills. These are administered by our central service centre in the UK, and operated online from India. Since the I-T Department visit to our project office in Delhi on October five, we have provided all the documents requested – over 2,500 – within the agreed timescale," it added.

Questions were raised over the deal after the Income Tax department had in its survey operations of SIS Live found alleged discrepancies in its financial documents.

Sources said the company was allegedly trying to evade taxes to the tune of Rs 29 crore.
The IT department subsequently asked Prasar Bharti, which had made Doordarshan enter into a contract with the company for broadcast rights of the Games, to cut taxes from the company's receipts under the Tax Deducted at Source (TDS) category