Vodafone Mobile Services Ltd. [ W.P.(C) 2301/2016] today moved the Delhi high court against a notice issued by the Income Tax department seeking a Special Audit.
The Court sought responses from centre challenging an Income Tax notice asking the company to show cause why its 2011-12 financial records not be subjected to special audit, to arrive at the total income for assessment year 2012-13.
The Comptroller and Auditor General(CAG) had submitted a report which was tabled in Parliament last week indicating a loss of Rs. 12,489 crore to the exchequer due to understatement of revenues by six telecom operators, including Airtel, Idea and Vodafone, the government has ordered a special audit of telecom companies for three years.
The income-tax department on 11 March issued a notice to the telecom company, seeking a special audit of their transactions and appointment of a special auditor in view of the merger of four of its entities into Vodafone Mobile Services, which led to voluminous records of the company.
Reportedly, Senior Advocate P. Chidambaram, appearing for Vodafone, contended that issuance of show cause notice to refer their accounts to special audit was done to “save” the department from “limitation” and to pass an assessment order by March 31.
During the hearing, central government standing counsel Manish Mohan, appearing for the Finance Ministry, objected to the appearance of P. Chidambaram in the matter, saying he used to be the Finance Minister when the 2013 amendment was made in section 142(2A) and was now challenging this provision on behalf of the company.
A Delhi High Court bench comprising of Justice S. Muralidhar and Justice Vibhu Bakhru has posted the hearing for 21 March.
