2012 (9) TMI 350

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....ely resulted into investigation by the Government of India under section 235 of the Companies Act, 1956, under which investigation by the Serious Fraud Investigation Office ("SFIO", for short) was ordered. According to the petitioner, after painstaking investigation, the SFIO report concluded that the financial statements of the company showed fictitious sales income and fictitious interest income on non-existent deposits. The SFIO report also found that the previous management paid taxes on fictitious income to convey a false impression that the income was genuine. The key findings in one of SFIO reports are mentioned at page 331 of volume II, which are reproduced hereinbelow :   "(a) The former promoters had substantially ov....

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...., petitioner-company represented to the Central Board of Direct Taxes on March 17, 2010, August 5, 2010, October 27, 2010, and November 8, 2010, stating that income declared by the earlier management in the returns of income had been overstated and tax credit thereon was excessively claimed, as evident from the subsequent restatement of accounts at the instance of the Company Law Board and consequent upon investigation by the SFIO. It was the case of the company before the Central Board of Direct Taxes that the Department had acted on the basis of false claims of payment of taxes made by the previous management by rectifying the assessment and raising tax demands. The case of the petitioner was that, in the circumstances, the overstated inc....