Q&A: Vineet Nayyar, Chairman, Mahindra Satyam

Even after the Income Tax (I-T) department issued notices to Mahindra Satyam (the brand identity of Satyam Computer) on Tuesday after it failed to pay Rs 616.53 crore tax, chairman Vineet Nayyar, however, is unfazed. At a conference call in Hyderabad, Nayyar says the company is not liable to pay as the money is actually owed to them (Mahindra Satyam). Excerpts:  

When the case is pending with the court, you are also bound to get a refund with interest. So, is it not right on your part to pay?
No. Why would I pay when the money is owed to me.

How are you planning to tackle Section 119?
It cannot be altered but we are aligned on the fact that Section 119 of the Income Tax Act clearly says that in case … (I will give you the hardship that was created by any given circumstance) … than the CBDT can relax any of the rules under the Act. And, in fact the CBDT did relax the rules under the Act for Satyam itself. In addition, the government had already given its own affidavit to the Company Law Board (CLB) saying that all Acts, provisions and laws of the country, including I-T laws, will be relaxed for purposes of putting in the revived financial statements. And that is exactly what we did. This is not being accepted now by the CBDT. So, there is a conflict between the affidavit in our view and by the Government of India and, by the CBDT.

Is that a right of Satyam to claim an exemption of the Act or is that the discretion of the I-T authorities to relax norms?
It is clearly the discretion of the CBDT. Nobody can exclaim this as a right. But the fact of the matter is that it is causing undue hardship when you impose a tax of this magnitude of income that never existed. Two, the Government of India had already given an affidavit, third is that the I-T has already also allowed us to restate the accounts for one year and they themselves had used this power . So, I do believe that though it is in their discretion … but remember discretion is judicial … always in law. And, it has to be judiciously implied. In this case, we believe a justification for it.

Why do you think they (the I-T department) are not willing to consider these figures to be judicious?
Aren’t you asking the wrong person (laughs). I am trying to find out a reason also why the I-T department is trying to do that.  We have represented the Andhra Pradesh High Court and now the matter is sub judice and I cannot make any view on that at this point.