The Income Tax department of the government of India has imposed a fine of Rs. 2000 crore on Finland based handset maker, Nokia for allegedly violating tax rules.

The IT department has sent the notice of fine to the company after the authorities had summoned Nokia India's auditor, PricewaterhouseCoopers in January in the case involving tax defaults by the finish company's plant in the country. The tax authorities had conducted a survey of operation at Nokia's Sriperumpudur factory and had found evidence of defaults in TDS deductions on royalty payments that were made by the plant to its parent company.

Nokia India has said that it is already cooperating with the IT department in order to allow the officials to get necessary information from the company. The company has confirmed that it has received the notice from the tax authorities and also pointed out that it is complying with local laws as well as the bilaterally negotiated tax treaty between the Governments of India and Finland. Nokia said that it would defend its position vigorously in the tax case.

Nokia filed a writ before the Delhi High Court on 22 March and the court has ordered the income tax department to file its counter affidavit. The court has also stayed the tax demand against the company.