The Income Tax Department has slapped a fresh demand note of £1.02 billion on British explorer Cairn Energy, just weeks after tax tribunal ITAT upheld levy of retrospective tax. In its March 9 order, the ITAT held that Cairn Energy was liable to pay tax on the 2006 transfer of India assets to the new Cairn India, prior to its listing. It also held that interest cannot be charged on it as the demand was raised using retrospective tax legislation.
Sending a notice to its shareholders, the company said, "Following the ruling of the ITAT, an amended tax demand, received on March 31, 2017, noted that the late payment interest would now be charged from February 2016, i.e., from 30 days following the date of the original 2016 final assessment order." It said ITAT's decision is "potentially subject to appeal."
