IndiGo gets Rs.944.20 Crore Tax Penalty Order from Income Tax Department; Airline calls it ‘Erroneous and Frivolous’

The Income Tax Department has slapped a Rs.944.20 crore penalty on InterGlobe Aviation, IndiGo’s parent firm, for the financial year 2021–2022. IndiGo, India’s largest airline, received the order on Saturday and has vigorously challenged it, calling it “erroneous and frivolous.”

IndiGo clarified in a regulatory filing on Sunday that the penalty was the result of a misunderstanding by the Income Tax Authority. The authorities believed IndiGo’s appeal to the Commissioner of Income Tax (Appeals) [CIT(A)] had been denied, but the appeal is still active pending adjudication. IndiGo claimed that the order violated the law and affirmed its intention to challenge the penalty through proper legal channels.

IndiGo has informed stakeholders that the penalty order will have no substantial impact on the company’s finances, operations, or other activities. The airline remains dedicated to fighting the order and is considering all legal options to handle the situation.

“The order for said Penalty under Income Tax was passed on the basis of an incorrect understanding that the Company’s appeal filed before the Commissioner of Income Tax (Appeals) against the Assessment order under Section 143(3) had been dismissed, whereas the same is still alive and pending adjudication. The Company strongly feels that the Income Tax Authority’s order is unlawful and erroneous. The Company will contest the order and will take appropriate legal action against it,” said an IndiGo representative.

IndiGo, India’s largest airline by market share, has been a major player in the aviation industry. However, taxation and compliance difficulties have frequently brought airlines under scrutiny. Experts believe that such tax issues are typical in the industry, and businesses routinely contest these assessments through appeal channels.