Vodafone moves court against I-T notice seeking 'special audit'

In another twist to a high-profile tax battle, Vodafone has moved the Delhi High court after it recieved a notice from the Income-Tax department seeking a "special audit" of the company's books.The department, which issued the notice under section 142 of the Income Tax Act on March 11, in its notice did not provide any ground or reason why an audit was sought.Vodafone, India's number two telecom carrier, has on contested the order, saying that the notice is "stigmatising" the company.The telco, as a measure of caution also told that the court it has obtained all necessary clearances for the merger of its subsidies, in case the notice was with respect to that.Vodafone India is in the process of merging licences of Vodafone Cellular, Vodafone Digilink, Vodafone East and Vodafone South with Vodafone Mobile as a step towards coming out with an IPO.The merger, which has been in the works since 2012, was blocked by the Department of Telecom, following which the Supreme Court last year directed Vodafone to deposit Rs 2,000 crore as possible unified licence fee that may arise in future.The company also told court that it has submitted all documents to the I-T department with respect to the corporate action.It further added that any step by the I-T department against the company should be seen as an "attempt to meet [the government's] revenue targets for this fiscal year".The Delhi High Court issued notice to the I-T department, seeking a reply. It has kept the matter for hearing on March 21.