Voda's 5.6% stake sale in Airtel invites fresh tax notice

Vodafone's 5.6 percent stake sale in Bharti Airtel for over USD 1.6 billion has opened the front for a fresh run in with the Income-Tax Department.

CNBC-TV18 exclusively learns that the revenue department is back in pursuit of Vodafone, and has served a fresh notice over non-filing of tax returns subsequent to divesting 5.6 percent  stake in Bharti Airtel in 2007.According to sources, the Income Tax Department has sought re-assessment of tax returns for assessment year (AY) 2008-09 as the department believed that Vodafone escaped assessment and did not file returns post the stake sale in Bharti Airtel.The revenue department is seeking additional revenues as the transaction gets time barred in AY 2015-16.

The fresh tax notice has been issued against Vodafone under Section 148 of the Income Tax Act. Vodafone has 30 days time to respond to the tax notice or file fresh returns for the transaction in 2007.Vodafone currently holds 4.4 percent stake in Bharti Airtel indirectly. CNBC-TV18's query to Vodafone failed to elicit any response.This move comes at a time when the British Telecom major, Vodafone, has already locked horns with the Indian Government over several tax disputes.

The Bombay High Court is hearing a petition filed by Vodafone challenging the Income Tax Appellate Tribunal or ITAT's order in a Rs 8,500 crore transfer pricing dispute.