InterGlobe Aviation, the parent company of IndiGo, has been slapped with a penalty order of Rs 944.20 crore by the Income Tax Department for the assessment year 2021-22. The airline, however, has termed the order “erroneous and frivolous.”

According to IndiGo, the penalty was imposed by the Assessment Unit of the Income Tax Department, while an additional fine of Rs 2.84 crore was levied by the Chennai Joint Commissioner. The dispute arose over a denial of input tax credit due to discrepancies in the financial records from fiscal 2018 to fiscal 2020.

“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,” IndiGo stated in its official response.

The airline further asserted that the penalty order “does not comply with the law” and reiterated its stance that it is “erroneous and frivolous.” IndiGo confirmed that it will challenge the ruling and pursue legal remedies against the decision. The airline also clarified that the penalty will not have any “significant impact on financials, operations, or other activities of the company.”