This directive came during the of the hearing pertaining to the case, where income-tax department had demanded Rs 617 crore of Mahindra Satyam based on previous years filing.
Mahindra Satyam has been arguing that the incomes were fictitious, therefore, the results were false. And since there were no revenues, the company should not be taxed.
The court stated that the accounts of Mahindra that were frozen will be released after it has paid the tax. An amount of INR 1,300 crore had been lying for the last 10 days on account of the orders from Central Board of Direct Taxes.
Admitting a plea by Mahindra Satyam against the IT wing's action, the tax bench of the high court comprising Justice V V S Rao and Justice Ramesh Ranganathan gave the interim order.
The income tax department had issued a demand of Rs 617 crore based on a foreign tax credit availed during the Raju years.
"We do not know whether Raju had siphoned off the real money or had shown the non-existent money on records or whether it was a mix of both. Mahindra bought the country's top IT firm at a cheap cost. Moreover, since the assessment orders were made final, even the CBDT will have little jurisdiction to order the reassessments of orders that reached finality long back," said JV Prasad, Income-tax counsel, to the High Court Bench.
Mahindra Satyam's counsel argued that the CBI and the department of company affairs had categorically stated that the revenues of the company were fictitious but CBDT was saying otherwise. This means that the two wings of the government were speaking in a different language. The counsel also asserted that the management was struggling to revive the scam hit company and actions of the tax department "will crush it to the core."
The next hearing date set by the court is April 20.