New Delhi: The Income Tax department has served a 2,000 crore notice on Finnish mobile maker Nokia for alleged evasion of taxes in its business transactions in the country.

The Delhi High court, however, has granted an interim stay on the demand after the mobile phone manufacturing company filed a petition challenging the order.

The department had on March 21 asked the firm to submit the amount of 2,000 crore in about a week's time, I-T department sources said today.

Nokia confirmed receiving the notice and said it is in "full compliance" with laws related to its business operations. "Nokia confirms it has received an order from Indian tax officials. Nokia reiterates its position that it is in full compliance with local laws as well as the bilaterally negotiated tax treaty between the governments of India and Finland, and will defend itself vigorously.

"In this regard, Nokia filed a writ before the Delhi High Court last week and on Friday, March 22 the Court has issued notice to the Income Tax department to file its counter affidavit and has granted interim stay of the entire tax demand raised against Nokia till further orders," a Nokia spokesperson said in a statement to PTI.

"Nokia arrived in India 18 years ago and has grown to become a market leader, contributing to the rapid growth of the Indian economy. Nokia has invested over $330 million in Chennai since setting up the factory," the Nokia spokesperson said.

The notice has been issued by the I-T department after it completed its probe and had conducted a 'survey' operation on the company's factory in Chennai and offices in Gurgaon, Haryana, earlier this year.

According to department sources, the I-T department will soon file its reply in the Delhi High Court stating the provisions that "enable and authorize" it to issue such a time-bound notice.

The tax evasion, according to these sources, pertains to royalty payment made against supply of software by the company's parent company which attracts a 10 percent tax deduction under the Tax Deducted at Source (TDS) category.

The department has analyzed the company's business statements since 2006, they said.

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