Vodafone Challenges Audit Order, Court Seeks Taxman’s Reply


New Delhi: Delhi High Court on Monday sought the Income Tax department’s response on Vodafone’s plea challenging an order directing special audit of its accounts for assessment year 2012-13.

A bench of Justices S Muralidhar and Vibhu Bakhru issued notice to the IT department and asked it to file its reply by July 28 on Vodafone’s plea.

The telecom major has challenged the department’s March 31 order directing special audit of its accounts for the assessment year 2012-13.

It alleged before the court that the order has been passed to “buy more time”.

Advocate Zoheb Hossain, appearing for the department, refuted the allegation.

The company had earlier moved the high court in March this year challenging the department’s show cause notice to it on why special audit be not carried out.

The plea was later disposed of by the court after the company agreed to file a reply to the show cause notice of March 11.

Vodafone had made the submission two days after the court, in a subtle warning, had told the company that it would be taking a risk if it did not file a reply to the IT department’s show cause notice.

The government had earlier told the court that by not responding to the notice, the company was trying to delay the assessment process beyond the March 31 deadline.

In its notice, the department had asked the company to show cause why its 2011-12 financial records should not be subjected to special audit to arrive at the total income for assessment year 2012-13.

In its show cause notice, the department had said that “during course of assessment proceeding, the information and details asked vide various questionnaire have not been submitted till date and you yourself submitting the reasons that due to extreme voluminous of records the specific information cannot be furnished or requesting to grant some more time to furnish details which itself is concrete evidence that records of assessee are voluminous and accordingly need thorough investigation by special audit.”