I-T summons Nokia auditor PwC arm in tax evasion case

The income tax (I-T) department, probing a charge of Rs 2,500-3,000 crore tax evasion by the Indian arm of Nokia, the Finland-based telecom multinational, has summoned the company's audit firm, Price Waterhouse and Co.

The latter issued a statement that, "The department has called us as they are seeking our inputs on this. We will extend full cooperation". A questionnaire sent to Price Waterhouse was not answered.

The audit for Nokia was done by four officials of PWC from its Delhi branch and they signed the audit report. I-T department sources allege misrepresentation of facts in the report and has also seized emails, described as “key evidence”. The audit firm and Nokia have both been summoned on Wednesday, said the official.

K Baskaran, public relations officer for the chief commisioner of income tax here, had said, "It has been gathered that Nokia India has been making remittances to its Finnish parent, Nokia OYJ, as payments for software supplies since 2005. The above payments for software would attract TDS (tax deducted at source) as per the provisions of the I-T Act, 1961. But is the learnt that the assessee company has not made any TDS on the above software payments. In order to gather the relevant evidence on the issue, a survey has been organised.”

Adding: "Prima facie, there appears to be some defaults with respect to TDS deductions on royalty payments made to its parent company at Finland. It is also observed that the company has changed its accounting model and is in the process of re-organising the existing business to bypass certain direct and indirect tax liabilities."

Nokia India had paid around $5 billion as royalty in the last six years and the TDS amounts works to $500 million, said an official, who didn’t want to be named.