With the Income Tax Department imposing a penalty of Rs 944.20 crore on IndiGo, India’s largest airline has termed the order “erroneous” and vowed to challenge it legally.

The airline’s parent company, InterGlobe Aviation, received the order on Saturday.

In a regulatory filing on Sunday, IndiGo stated that the penalty pertains to the assessment year 2021-22.

The company strongly believes that the order is not in accordance with the law and has termed it “erroneous”.

“The order has been passed on the basis of an erroneous understanding that appeal filed by the company before the Commissioner of Income Tax (Appeals) (CIT(A)) against the assessment order under Section 143(3) has been dismissed, whereas the same is still alive and pending adjudication,” the airline said in its filing.

IndiGo has assured that it will pursue legal remedies to contest the penalty. Despite the hefty fine, IndiGo has clarified that the order will not have any significant impact on its financials, operations, or overall business activities.

“The said order does not have any significant impact on financials, operations or other activities of the company,” it added.

The penalty comes at a time when IndiGo is already navigating financial challenges. The airline recently reported an 18.6 per cent decline in its consolidated net profit for the third quarter of FY25, with earnings falling to Rs 2,448.8 crore from Rs 2,998.1 crore a year ago.

Rising operational costs, which surged by 20 per cent to Rs 20,466 crore, played a major role in the dip in profitability.

However, IndiGo remains a dominant player in the Indian aviation sector. According to the Directorate General of Civil Aviation (DGCA), domestic air passenger traffic grew by 6.12 per cent in 2024, reaching 16.13 crore passengers, and IndiGo continues to hold the largest market share at 64.4 per cent, far ahead of Air India’s 26.4 per cent.

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