Inter Globe Aviation Ltd, the parent company of budget airline IndiGo, has received a tax penalty of ₹944.20 crore from the Income Tax Department for the assessment year 2021-22.
The company has dismissed the penalty as "erroneous and frivolous" and intends to contest it through legal channels.
In an official statement, IndiGo clarified that the penalty was imposed due to an incorrect understanding that its appeal before the Commissioner of Income Tax (Appeals) had been dismissed. The airline maintained that the appeal remains active and is still under adjudication.
"The Income Tax Authority has passed an order imposing a penalty of ₹944.20 crore for the assessment year 2021-22. This decision is based on an erroneous assumption that the company’s appeal against the assessment order under Section 143(3) has been dismissed, whereas it is still pending adjudication," IndiGo stated.
The airline firmly refuted the allegations, asserting that the decision lacks legal merit. It emphasised its confidence in the judicial process and assured stakeholders that it would take all necessary legal measures to challenge the order.
"The company strongly believes that the order is not in accordance with the law and is both erroneous and frivolous. Accordingly, the company will contest the penalty and seek appropriate legal remedies. This order will not have any significant impact on our financials, operations, or other activities," the airline added.
Despite the announcement, IndiGo's shares closed 0.32% lower at ₹5,113 on the stock market. However, the airline’s stock has shown resilience, registering an 11.36% increase on a year-to-date basis.
This growth is largely attributed to strong investor confidence, bolstered by IndiGo’s expansion plans and future growth strategies.
As of December 2024, the company’s promoters held a 49.27% stake in IndiGo.
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