SATYAM SCAM: ITAT Orders Fresh Assessment for Tech Mahindra based on Telangana HC Verdict [Read Order]

The Hyderabad bench of the Income Tax Appellate Tribunal ( ITAT ) instructed the Assessing Officer to reassess Satyam-Tech Mahindra's income for Assessment Year (AY) 2003-09 based on revised financials, enforcing the decision of the Telangana High Court.

Read More: Satyam Scandal Impact: From Corporate Fraud to Tax Reform

The Satyam Computer Services scam is considered a dark stain on India’s corporate history. After the scam got exposed, the Government of India immediately took over Satyam Computer Services Ltd. to prevent its collapse and protect the credibility of the Indian corporate sector. The company was later acquired by Tech Mahindra Ltd. through a bidding process.

After the takeover, a dispute arose between the revenue authorities and the assessee regarding the assessment of Satyam Computer Services Ltd. for AYs 2003-04 to 2008-09, during which the financial scam had occurred. Aggrieved by this, the assessee moved before the Commissioner of Income Tax (Appeals)  (CIT(A)), and then both parties filed cross-appeals before the tribunal.

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Counsel A.V. Raghuram, representing the assessee, submitted that the subject matter of the case for the same AY had already been settled by the Telangana High Court in its judgement Satyam Computer Services Limited v. CBDT. He stated that the court had quashed the earlier assessment orders and directed fresh assessments based on revised financial statements.

The counsel for the revenue, M. Narmada, also agreed with the contentions of the assessee’s counsel in light of the High Court’s decision.

After hearing submissions made by both parties, the bench comprising Ravish Sood (Judicial Member) and Manjunatha G (Accountant Member) evaluated the legal background of the case in detail.

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The bench noted that the High Court had already addressed the main issues brought up in the present appeals. After ruling that the initial assessments violated constitutional principles, the High Court ordered the Revenue to perform fresh evaluations based on updated financial statements that did not contain any fictitious entries.

Taking note of the High Court’s decision, the tribunal held that the matters required reconsideration. The bench, therefore, remitted the cases back to the AO for reassessment as per the High Court’s directions.

To Read the full text of the Order CLICK HERE

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