Income Tax Dept Imposes ₹944 Crore Penalty on IndiGo
The Income Tax Department has levied a massive fine of ₹944.2 crore on InterGlobe Aviation Ltd, the holding company of IndiGo Airlines, for the Assessment Year 2021-22. The department charges that the airline had misrepresented the income, causing the large fine under provisions dealing with misrepresentation in tax returns.
IndiGo has vehemently denied the allegations, describing the penalty as “erroneous and frivolous”. The airline said that the order is a result of a misreading of facts, specifically regarding an appeal pending with the Commissioner of Income Tax (Appeals). IndiGo intends to appeal the order in the courts, stating that it has always followed accounting and tax norms.
This is in line with a series of recent tax problems for the carrier. This month, IndiGo was issued GST demand orders for ₹116 crore by Delhi and Chennai authorities. Additionally, the Customs Department had also issued notices of penalty with regard to duty on jet fuel and import of aircraft parts.
In spite of the continued regulatory focus, IndiGo has insisted that the penalty would not substantially affect its financial position or operations. With good market share and profitability, the carrier remains a leading player in India’s aviation industry.
Analysts opine that although the fine will cause near-term apprehension, the fundamentals of the airline are intact. Investors and stakeholders are waiting and observing how the legal proceedings play out, which will reveal the ultimate result of this contention.
