In a filing made with Bursa Malaysia yesterday, Aeon Credit said it was served with notices of additional assessment and penalties for every year starting from 2010, by the IRB on Tuesday.

“The company has appointed tax solicitors and is initiating proceedings to challenge the validity and legality of the said notices of additional assessment,” the filing said.

According to Aeon Credit, these taxes and penalties were in relation to the IRB varying the loan transaction collaterised by receivables undertaken by the company with a local financial institution to that of a sale of receivables.

“However, the IRB did not specify the provision of the Income Tax Act 1967 in making this variation.

“The IRB also raised time barred assessments for the years of assessment 2010 and 2011, but it did not provide any reason for raising the time barred assessments,” Aeon Credit said in its filing.

The penalties are believed to have been incurred based on the alleged submission of incorrect returns.

The company said it has reasonable grounds to challenge the validity of the IRB notices on the additional assessment and penalties .

“This is especially so, when at all material times, the company had sought professional advice from an independent and reputable audit and tax firm on its accounting and tax treatment and further, the assessments for the years of assessment 2010 and 2011 are time barred,” Aeon Credit said in its filing.

“Further announcements will be made if there are any material updates on the matter,” the company said.

Meanwhile, Aeon Credit shares rose 8 sen to RM13.24 at the close of trading yesterday.