InterGlobe Aviation Ltd, the parent company of budget airline IndiGo, has found itself at the center of a significant tax dispute after the Income Tax Department imposed a penalty of ₹944.20 crore for the Assessment Year 2021-22. However, the Gurugram-based airline has strongly contested the fine, calling the order "erroneous and frivolous" and vowing to challenge it through legal channels.
In a statement, IndiGo clarified that the penalty was based on a mistaken premise that its appeal against an assessment order under Section 143(3) had been dismissed when in reality, it was still under adjudication before the Commissioner of Income Tax (Appeals). The company reiterated its position that the order was legally flawed and without merit, assuring stakeholders that it would not affect its financials, operations, or other business activities.
"The company strongly believes that the order passed by the Income Tax Authority is not in accordance with law and is erroneous and frivolous. Accordingly, the company will contest the same and shall take appropriate legal remedies against the aforesaid order. Therefore, the said order does not have any significant impact on financials, operations or other activities of the company," IndiGo stated.
The penalty comes at a time when IndiGo has been performing strongly in the aviation sector. Despite the tax dispute, the airline’s stock showed resilience, settling just 0.32% lower at ₹5,113. Notably, IndiGo’s shares have climbed about 11.36% on a year-to-date basis, driven by strong investor sentiment following its expansion plans and growth strategies.
IndiGo remains one of India’s leading airlines, with promoters holding a 49.27% stake as of December 2024. The airline has been aggressively expanding its fleet and network, making it a dominant player in the domestic and international aviation market. While the tax dispute introduces a legal challenge, analysts believe it is unlikely to significantly derail the airline’s long-term growth trajectory.
