IndiGo to contest ₹944cr tax penalty imposed by IT department
What's the story
IndiGo's parent company, InterGlobe Aviation Ltd, has been slapped with a hefty ₹944.20 crore penalty by the Income Tax (I-T) department. The airline revealed this in a recent BSE filing. The company said that this fine was imposed for the fiscal year 2021-22 on the wrong assumption that their appeal against the assessment order under Section 143(3) was dismissed, when it is still pending adjudication.
Legal action
IndiGo to contest penalty, says it won't affect operations
IndiGo has termed the new tax penalty "erroneous and frivolous," claiming it won't affect the airline's financials or operations significantly. The company strongly believes the order passed by the Income Tax Authority isn't legally justified. Hence, IndiGo intends to challenge this order and also seek appropriate legal remedies against it.
Market reaction
Stock performance remains steady despite tax penalty
IndiGo's shares closed 0.32% lower at ₹5,113 on Friday but have seen an increase of 11.36% on a year-to-date basis. The stock has consistently traded above the 5-day, 10, 20, 30, 50, 100, 150-day, and even the 200-day simple moving averages (SMAs). Its relative strength index (RSI) for a 14-day period stands at an impressive figure of 71.22, indicating that it is nearing overbought territory.