‘Erroneous’: IndiGo after I-T department imposes ₹944 crore penalty; airline to challenge order | Company Business News

InterGlobe Aviation, parent company of the country’s largest airline, IndiGo, on Saturday, received a ₹944.20 crore penalty order from the Income Tax Department, which the airline said was “erroneous”.

The Assessment Unit of the Income Tax Department (Income Tax Authority) passed an order imposing ₹944.20 crore penalty for the assessment year 2021-22, according to IndiGo. Meanwhile, the Chennai Joint Commissioner slapped a fine of ₹2.84 crore on the company. The department denied input tax credit due to the discrepancy for fiscal 2018 to fiscal 2020.

IndiGo Says, ‘Will Contest Penalty, Take Legal Remedies’

In a press statement issued by an IndiGo spokesperson, airline claimed that the order for the penalty has been passed on “erroneous understanding” and that the company will seek legal remedies to correct it.

“The order for said Penalty under Income Tax has been passed on the basis of an erroneous understanding that 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. The Company strongly believes that the order passed by Income Tax Authority is not in accordance with law and is erroneous. The Company will contest the same and shall take appropriate legal remedies against the order,” the spokesperson said.

What did IndiGo’s regulatory filing say?

“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,” it said.

The airline further said that the order passed by the Income Tax Authority doesn’t comply with law and is “erroneous and frivolous”. The company will contest the same and will take appropriate legal remedies against the order, the statement added. Further, IndiGo stated the order does not have any significant impact on financials, operations or other activities of the company.

‘GST demand order of ₹116 crore’

InterGlobe Aviation Ltd, on February 5, had said it got GST demand orders worth ₹116 crore, which comprised penalties from the additional commissioner of the Central Goods and Service Tax in Delhi’s South Commissionerate, including the joint commissioner of GST and Central Excise, Chennai South.

The Delhi additional commissioner had imposed a penalty of ₹113 crore. According to the department, it imposed GST on services provided to offshore recipient and was not an export of services, with refusal of input tax credit on certain services for financial year 2017-18.

Fine of ₹25 lakh and ₹2.17 crore in January

On January 15, the customs department on imposed a fine of little over ₹25 lakh on IndiGo in connection to duty on jet fuel. Joint Commissioner (Customs), Office of the Commissioner of Customs, Ludhiana had slapped it. InterGlobe Aviation had said there was “demand for additional duty of customs on remnant Aviation Turbine Fuel (ATF)”.

Principal Commissioner of Customs, Air Cargo Complex (Import) had levied a ₹2.17 crore penalty on January 6 after refusing the duty exemption on import of aircraft parts as per the regulatory filing. There was “no material impact on financials, operations or other activities of the company,” it had said.