Govt sets aside Rs 617 cr tax demand on Satyam

NEW DELHI, INDIA: Mahindra Satyam, formerly Satyam Computer Services, got a breather on Friday, as the government has decided to set aside its order directing the scam-hit IT firm to pay nearly Rs. 617 crore as income tax.

According to a PTI report, the central government has informed the Supreme Court that it would give a fresh hearing to the firm’s plea challenging the tax demand.

Attorney General Goolam E Vahanvati, appearing for the Central Board of Direct Taxes (CBDT), told the apex court that it would recall its March 10, 2011, order, demanding Rs. 617 crore in tax and decide afresh on the actual tax liability of Satyam Computer Services.

While issuing the order, the Income Tax Department had also frozen the bank accounts of Mahindra Satyam after the software firm failed to pay a tax demand.

On Wednesday the Supreme Court asked the CBDT to maintain status quo with regard to its Rs 617 crore tax demand from Satyam Computers. It had also asked the department to reassess the actual liabilities of the scam-hit information technology (IT) firm after omitting fictional sales income.

The bench, however, refused Satyam Computer's plea to de-freeze its bank account worth Rs 1,300 crore, said PTI.

The apex court’s direction came over a petition filed by the company, challenging the orders of the Andhra Pradesh High Court, which had directed the firm on March 30 to pay a banker’s cheque of Rs. 350 crore and a bank guarantee for Rs. 267 crore within a week.