High Court restrains Satyam and I-T from accessing bank

Mahindra Satyam Logo

Hyderabad, Mar 26: The Andhra Pradesh High Court directed both IT company, Mahindra Satyam, and income tax (I-T) department to refrain from accessing the bank accounts attached to the company till March 31. These accounts contain Rs 1,300 crore.

After the Central Board of Direct Taxes (CBDT) had turned down Mahindra Satyam's plea to order a stay on the tax demand by I-T department; the I-T department attached twenty-six bank accounts of Mahindra Satyam and issued 26 garnishee orders.

A garnishee order makes it mandatory for the banker to pay the demanded money lying in the company's accounts to the officers of income-tax department.

The High Court's restraining order coming around the very-end of the financial year, will raise many eye-lids. There was concern among the employees if the company will meet its month-end obligation. To rest any apprehensions among the employees an internal mail was also circulated by the HR department that there is no need to fear.

Vineet Nayyar, Chairman of Mahindra Satyam said to TOI, "salaries are not and will not be an issue. We have more than enough money to pay salaries."

The order on restrain was issued by a bench comprising Justice V V S Rao and Justice Ramesh Ranganathan. The matter will be heard on March 30.

The I-T department had asked Mahindra Satyam to pay takes and fines to the tune of Rs 616.54 crore tax from previous year from 2002-03 to 2007-08. Mahindra Satyam contends that the period stated are from the days of Ramalinga Raju, when he was creating fictitious profit. Therefore, the company argues it cannot pay taxes on "fictitious and non-existent income".

The IT company, had over 50,000 employees when the scam hit its image in 2009. On December 31, 2010, the company recorded a headcount of 28, 832 employees. During the December quarter (October-December 2010) the company incurred an employee cost of Rs 831 crore. Mahindra Satyam has added nearly 2,000 employees since then.

OneIndia News

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