No more extension to file reply on special audit notice would be granted: HC to Vodafone

New Delhi: The Delhi High Court on Monday asked Vodafone to reply to Income Tax Dept show cause notice by March 23. The court further added that no more extension to file reply would be granted.

Vodafone had filed a plea 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.

A bench of justices S Muralidhar and Vibhu Bakhru issued notice to the government and the IT department seeking their replies by March 21 to the plea which also challenges the amendment to section 142(2A) of IT Act that says the assessing officer can seek a special audit in certain circumstances.

Vodafone Mobile Services Ltd has contended that referring a company for special audit is akin to a stigma on it and this power ought to be exercised only after satisfying the twin conditions of "complexity in the accounts and protecting interests of the revenue".

Earlier, the Income-Tax Department had issued a reminder to Vodafone over its 14,200-crore rupees tax demand.

The department had sent a notice to Vodafone International Holdings BV in this regard as the tax is due from the acquisition of 11 billion dollar Hutchison Whampoa`s India telecom business in 2007.