InterGlobe Aviation Ltd, the parent company of budget airline IndiGo, announced on Sunday that it had been slapped with a ₹944.20 crore penalty by the Income Tax Department for the Assessment Year 2021-22. However, the Gurugram-based airline has strongly refuted the claims, calling the order “erroneous and frivolous”, and has vowed to challenge it through legal means.
IndiGo Rejects Tax Penalty, Calls It Legally Flawed
In an official statement, IndiGo clarified that the penalty was imposed based on a mistaken assumption that its appeal against an earlier tax assessment order had been dismissed. “The Income Tax Authority has passed an order imposing a penalty of ₹944.20 crore… based on an erroneous understanding that an appeal filed before the Commissioner of Income Tax (Appeals) has been dismissed, whereas it is still alive and pending adjudication,” the company stated.
The airline has assured investors and stakeholders that the tax order will not impact its financial position, day-to-day operations, or long-term growth strategies. “The company strongly believes that the order is not in accordance with law and is erroneous and frivolous. Accordingly, IndiGo will contest the same through appropriate legal remedies,” it added.
Stock Performance and Market Reaction
Following the news, IndiGo’s stock price dipped slightly, closing 0.32% lower at ₹5,113 on Sunday. However, the airline’s stock has shown resilience, rising 11.36% year-to-date, according to Business Today.
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Despite the penalty notice, investor sentiment remains optimistic due to IndiGo’s aggressive expansion plans and strong market position. As of December 2024, IndiGo’s promoters held a 49.27% stake in the company, reflecting continued confidence in its future growth.
Legal Battle Ahead for IndiGo
The aviation giant is preparing to challenge the penalty through appropriate legal channels, emphasizing its confidence in the judicial process. If successful, IndiGo could set a precedent for similar tax disputes faced by corporate entities.
The airline, which dominates India’s aviation market, continues to focus on expansion and operational efficiency, maintaining its position as the country’s leading low-cost carrier.
