HC stays I-T order on attachment of Satyam's land, buildings

In a major relief to Mahindra Satyam, the Andhra Pradesh High Court today stayed an order issued by the Income Tax (I-T) department seeking attachment of the company's land and buildings.

The division bench comprising Justices Madan B Lokur and TV Sanjay Kumar observed that the attachment notice issued by the I-T department was in violation of the high court's earlier order.

The I-T Department argued that it was to get Rs 4,000 crore from the company and so it had to attach the property in order to protect the interest of the department.

The court also observed that the I-T department's move was not warranted.

Mahindra Satyam, formerly Satyam Computer Services Limited, was served with a provisional attachment order on February 3 from the Income Tax Department (Additional Commissioner of Income Tax (ACIT), Central Range -- 3, Hyderabad) attaching land and buildings of the company.

"The company had received a provisional attachment order dated January 30, 2012, from the Additional Commissioner of Income Tax (ACIT), Central Range -- 3, Hyderabad attaching land and buildings of the company," Mahindhra Satyam had earlier said in a filing to the Bombay Stock Exchange (BSE).

The I-T department had issued notices to the company seeking Rs 617 crore tax for the assessment years from 2003-04 to 2008-09, when the company was run by founder B Ramalinga Raju and his team.

Subsequently, the company deposited a bank guarantee of Rs 617 crore last April with the I-T department as directed by the Supreme Court and the bank guarantee furnished was valid until December 31, 2011.

The company had said that an interim order from the Andhra Pradesh High Court on January 31 has directed both "Satyam and Income Tax department to maintain status quo".

The said order also directed that the bank guarantee furnished by the company will not be encashed by the Revenue department until further orders, it further said.

Once a leading Indian IT company, Satyam was hit by a multi-crore rupees corporate fraud, admitted by its founder and the then chief Ramalinga Raju in January 2009.