Sinha, who was holed up in a series of meetings on Wednesday with members of the Central Board of Direct Taxes, expressed his unhappiness over the entire handling of the issue which gave credence to rumours leading to the market crash.

Following the meetings, Vijay Mathur, joint secretary in the foreign tax division, has been rushed to Mumbai to assure the FIIs that no policy changes were on the anvil and there was no cause for panic.

Sources said that Sinha took finance secretary, PG Mankad and CBDT chairperson SK Nigam to task over the inability in acting fast on the issue. By the time, a final decision was taken to put all action against FIIs on hold, the markets had closed for the day and the damage had been done.

Sinha was further peeved since the assessment orders for paying up the taxes were filed on March 31 itself which was the last date for paying advance iuncome tax.