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Rediff.com  » Business » Satyam: Finance ministry may conduct special audit

Satyam: Finance ministry may conduct special audit

Last updated on: May 28, 2009 16:07 IST
The Finance Ministry is evaluating options of conducting a special audit of scam-tainted IT firm Satyam Computer's accounts to ascertain the company's tax liability.

A decision on this will be taken after the tax authorities go through the report of the Serious Fraud Investigations Office, (SFIO) which they have requested from the Corporate Affairs Ministry.

"We have written to the Ministry of Corporate Affairs to provide us the SFIO report on Satyam Computer," a source said.

Recently, the income-tax authorities conducted a special audit of the accounts of several firms including real estate major DLF, which got a tax notice of about Rs 400 crore (Rs 4 billion).

However, in the case of Satyam, the tax department may not conduct a special audit if reports from other government agencies like the SFIO serve the purpose.

"We may or may not order a special audit as that may further delay the (tax assessment) order. If our points are covered in the reports filed by other agencies, we don't need to conduct a special audit," the source said.

The I-T department does a special audit for accounts found to be inaccurate under Section 142 (2A) of the Income-Tax Act. Under that Act, an assessing officer "in the interest of revenue" can order a special audit of the accounts of a company.

The tax department has been scrutinising the company documents for about two to three weeks after getting the papers, which were with the Criminal Investigation Department of the Andhra Pradesh government and the Central Bureau of Investigation.

"Recently they have allowed us to inspect the documents. It has been about 2-3 weeks that we have been inspecting the documents, which were earlier in the possession of the CID and CBI," the source said.

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