A fresh tax notice of up to Rs 30,700 crore has been issued to British firm Cairn Energy by the Income Tax department. The tax has been imposed since Cairn Energy has failed to pay capital gains tax of Rs 10,247 on time. The new tax notice comes after the recent verdict given by the Income Tax Appellate Tribunal (ITAT), upholding the levy of retrospective tax. The I-T department has also issued a show cause notice to Cairn Energy, demanding explanation, as to why penalty should not be imposed for non-payment of tax and not filing tax returns.
It may be recalled that capital gains tax was applicable on Cairn Energy on March 31, 2007 and it was supposed to file its returns by December 2007. However, the company filed the returns in 2014, almost seven years after the applicable date. This is why the I-T department has issued a new tax notice of Rs 10,247 crore and penalty of Rs 18,800 crore in the form of interest for 10 years. The penalty is applicable under Section 271 (1) (c) of the Income Tax Act.