I-T dept to check special audit report on Bharti Airtel

The Income-Tax Department (I-T) has asked the Department of Telecom (DoT) to submit a copy of the special audit report on leading telecom company Bharti Airtel, to look into corporate tax or income-tax issues.

Government-appointed auditors Contractor Nayak and Kishnadwala had submitted a report on Bharti Airtel in March this year, which had not found any wrong-doings in accounting practices, the company had said.

The special audit was done on all leading telecom firms to ensure they were paying the required annual licence fee to the government and that there was no diversion of revenues to segments which attracted a lower fee as a percentage of revenue.

"A VIP reference has been forwarded to this office regarding certain discrepancies in the accounts of Bharti Airtel, pointed out by the special auditor Contractor Nayak and Kishnadwala, led by managing partner Himanshu Kishnadwala amd appointed by DoT," Additional Commissioner of Income Tax said in a communication to DoT.

The I-T Department said a complete copy of the special audit report should be submitted to enable its examination from the corporate tax/income tax angle.

"Please note the income tax assessments of Bharti Airtel Ltd for Assessment Years 2007-08 and 2008-09 are pending and the same are time-barring proceedings under provisions of the I-T Act."

"Therefore, it is kindly requested the copy of the special audit report referred above may be forwarded immediately," the Additional Commissioner of Income Tax said.

According to the initial response of DoT, the report had found no fraud, though it had talked of some irregularities as being prevalent in the industry.

The audit report had also raised certain revenue-specific queries involving an amount of about Rs 100 crore, while giving virtually a clean chit to the accounts of the multi-billion dollar company.

"The special audit of Bharti Airtel's accounts commissioned by DoT has not found any irregularity in the company's books or loss of revenue fee to the government on account of licence fee," the company's top official, Manoj Kohli, had said.

The report is a part of the special audit ordered by the government on leading telecom operators, including Anil Ambani-led Reliance Communications, Tata Group's Tata Tele Services, Birla's Idea Cellular and Vodafone Essar.

"Bharti Airtel has always maintained the highest standards of corporate governance and has displayed the highest regard for regulatory compliance. The findings of the special auditors appointed by DoT have validated this belief," Bharti Airtel had said.