InterGlobe Aviation Limited, the parent company of IndiGo Airlines, has been issued a penalty order of INR 944.20 crore by the Income Tax Department for the assessment year 2021-22. The penalty was imposed under Section 270A of the Income Tax Act.

According to InterGlobe Aviation, the penalty is based on a misunderstanding by the tax authorities, who incorrectly assumed that the company's appeal against a prior assessment order had been dismissed. In reality, the appeal is still pending before the Commissioner of Income Tax (Appeals). The company claimed, "The order for said penalty under Income Tax has been passed on the basis of an erroneous understanding that the appeal filed by the Company before the Commissioner of Income Tax (Appeals) against the Assessment Order under Section 143(3) has been dismissed, whereas the same is still alive and pending adjudication."

InterGlobe Aviation also alleged that the penalty order is not in accordance with the law and is flawed. The company stated that it would challenge the order through appropriate legal channels. It emphasised that this development will not have a huge impact on its financial position, operations or other business activities.

This penalty follows previous tax demands on InterGlobe Aviation. In November 2023, the Commissioner of Income Tax (Appeals) upheld tax demands totaling approximately INR 1,666 crore for the assessment years 2016-17 and 2017-18. These demands were related to the tax treatment of incentives received from aircraft and engine manufacturers and the disallowance of certain expenses. The company is also contesting these demands, stating that it was confirmed without granting an opportunity for a personal hearing and without adjudicating the matter on its merits. ​