The Central Board of Direct Taxes (CBDT) is believed to have turned down the request of Mahindra Satyam to fully adjust taxes paid by its erstwhile owner Ramalinga Raju on fictitious income.

Tech Mahindra had acquired Satyam Computer, after a multi-crore accounting fraud in the company came to light in January 2009. After acquisition, the company was re-branded as Mahindra Satyam.

The CBDT, sources said, has passed an order on the tax issues raised by Mahindra Satyam and sent it to the company yesterday.

While CBDT may not fully adjust taxes paid by the company, the Hyderabad-based firm may get some relief with regard to taxes paid by Satyam Computer Services on fictitious income for years 2007-08 and 2008-09, sources said.

The company would not get tax relief on such income before 2007-08 year as there are no provisions in the Income Tax Act for refund of tax for which revised returns have been filed one year after the assessment year.

Mahindra Satyam has been seeking return or adjustment of taxes paid on inflated income when disgraced founder Ramalinga Raju was chairman of the IT company. The company has argued that the tax payments were made on account of alleged fudged records shown by the company.

Efforts to contact Mahindra Satyam proved futile as the spokesperson did not respond to either phone calls or SMSes.

The Supreme Court had earlier this month said that the CBDT order in the tax dispute case would take effect after two weeks so that the IT company could get time to challenge the ruling on an appropriate forum.

The order came as a breather for Mahindra Satyam which had furnished a bank guarantee of Rs 617 crore to the government on the apex court's direction for its accounts to become functional.

The CBDT had earlier frozen the bank accounts of Mahindra Satyam. It had served notice for audit of its accounts for the assessment years 2003-04 to 2008-09 as the company was found guilty of illegally claiming tax credit on fictitious income during the period.