The government on Wednesday approached the Delhi high court challenging an order of the Income Tax Appellate Tribunal (ITAT) that gave relief to mobile phone maker giant Nokia in a case of alleged tax evasion.

A division bench comprising justice BD Ahmed and justice Siddharth Mridul admitted the petition filed by the income tax department and posted the matter to 12 April for next hearing.

In its petition, the IT department said the ITAT has wrongly deleted the penalty imposed by it on Nokia India for allegedly wrongly declaring its income.

It further said “assessee (Nokia) knowingly furnished inaccurate particulars of its income and has concealed the facts relating to computation of its correct income for the year under consideration.”

The IT department had imposed a penalty of Rs1.14 crore on Nokia on 27 March 2006, for allegedly furnishing wrong returns for the financial year 2001-02.

According to IT department, Nokia had claimed nil tax on some aspects such as allowances on foreign travel, account provision of warranty, marketing expenses etc.

Later, in March 2004, the department picked up Nokia’s income tax return for scrutiny and sent a notice after finding alleged irregularities.

After scrutiny, IT department assessed Nokia’s income at Rs12 crore and imposed a fine of Rs1.4 crore and equal amount of tax for alleged evasion of tax by the firm.

This was challenged by Nokia before the Income Tax Appellate Tribunal, which deleted the penalty provision.