Huawei India CEO, 3 executives summoned in I-T case

A Delhi court has summoned Huawei Telecommunications (India), its CEO Li Xiongwei and three senior company officials in connection with a complaint filed by the Income Tax (IT) department, which accuses them of having withheld information that had been sought. “The failure of the accused company and its officers to comply resulted in the obstruction and stifling of the search action of the authorized officers,” the court said in the order passed Thursday. “The culpable mental state of the accused must be presumed.

There is sufficient evidence on file to summon the company and four defendants for the commission of an offense punishable under Article 275-B read with Article 278-B of the Income Tax Act . The charges carry a maximum prison sentence of two years.

Before issuing the order, the court reviewed the statements of the four company officials recorded by the Department of Income Tax. “It is apparent from these statements and other documents appended to the complaint that the defendant deliberately chose to give vague answers to certain questions,” says the order. “On the other questions, the answers given by the defendant were incongruous with each other.”

The court order said: ‘It appears that the defendants were only trying to somehow confuse the authorized officer in order to deny access to the company’s books and other documents. An unreasonably long delay was also requested by the defendants to provide data and information, which should have been readily available from the company.»

The court held that the directors hold key positions and are in charge of the day-to-day business of the company. Besides the chief executive, the Huawei executives summoned are deputy chief financial officer Sandeep Bhatia, tax chief Amit Duggal and Long Cheng, who is in charge of transfer pricing. None of them could immediately be reached for comment. The IT department alleged that the four officials “willfully and willfully failed to comply with the relevant provisions of the Income Tax Act.”

The executives acted in concert with each other and deliberately failed to provide authorized officers with the necessary facilities to inspect the books of account, he said, adding that they failed to provide relevant documents when we had asked them. The court said it would see “whether a prima facie case is established against the defendants or not”.

Vigilance circular
The CEO of Huawei India had asked Delhi HC to challenge a supervisory circular that prevented him from leaving India in May for a business meeting. Li, a Chinese national, was arrested at New Delhi airport on May 1 and denied boarding a flight to Bangkok to attend a meeting on behalf of Huawei India.

The Delhi High Court, hearing the petition, asked the Income Tax Department – ​​at whose request the circular was issued – why the LOC should not be set aside.

Li’s lawyer, Vijay Aggarwal, argued that the LOC was against the principle of natural justice “audi alteram partem (every individual should have a chance to be heard)”. As an interim relief, the Delhi HC had said Li could contact the investigator in case he needed to travel abroad for emergency reasons.

The search and seizure operations were undertaken on February 15 by tax authorities at sites in Gurgaon and Karnataka, including Li’s residence. The searches lasted eight days, during which documents and gadgets as well as electronic records in laptops, hard drives and cell phones of employees were seized.

The department also seized the bank accounts and trade receivables of Huawei India. It is alleged that Huawei made inflated payments against receiving technical services from related parties outside India. OltNews