The sources said operations from Tier-II and Tier-III cities are likely to be affected until March-end.
It had also said that the I-T department had frozen its account due to non-clearance of tax dues.
"We confirm that our Bank accounts were attached by the tax authorities.
"However, this has happened in the past not just to us but also to Air India. We have resolved issues before and will do so again," the Kingfisher spokesman had said.
The airline began cancelling its flights as it held talks with bankers to finalise a deal for funds.
Kingfisher posted a Rs 444 crore (Rs 4.44 billion) loss for the third quarter.
The airline has suffered a loss of Rs 1,027 crore (Rs 10.27 billion) in 2010-11 and has a debt of Rs 7,057.08 crore (Rs 70.57 billion), latest figures show.
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