The Delhi High Court on Monday refused to grant any more time to Vodafone Mobile Services Ltd to reply to an Income Tax notice asking the company why its financial records for 2011-12 should not be subjected a special audit. Vodafone has to file its response by March 23, reported ANI. The audit was ordered after the Comptroller and Auditor General of India claimed huge losses to the exchequer from under-reporting of revenues by telcos, reported the Economic Times.

Vodafone had argued that referring a company for special audit was akin to casting a stigma on it and that power should be exercised only after satisfying the twin conditions of "complexity in accounts and protecting interests of the revenue". On Thursday, the court had sought response from the Centre and the I-T department on the plea.

In its show-cause notice from March 11, the tax department had said, “During the course of assessment proceeding, the information and details asked have not been submitted till date and you yourself submitting the reasons that due to extreme voluminous of records the specific information cannot be furnished or requesting to grant some more time to furnish details, which itself is concrete evidence that records of assessee are voluminous and accordingly need thorough investigation by special audit.”

It had further said “the above aspects render the accounts of assessee company very complex with voluminous transaction, thereby necessitating thorough investigation, by special audit for arriving at correct amount of total income. Accordingly, you are hereby given an opportunity to show cause why your case should not be referred to special audit.”