Actor Vijay’s tax penalty case: Madras High Court dismisses his plea

Madras High Court upholds actor Vijay’s ₹1.5 crore tax penalty for failing to disclose ₹15 crore income in 2015-16.

The Madras High Court on Friday (February 6, 2025) dismissed a writ petiton filed by actor-turned-politician C. Joseph Vijay of Tamilaga Vettri Kazhagam (TVK) in 2022 against the imposition of a penalty of ₹1.5 crore on him by the Income Tax department for not having voluntarily disclosed an additional income of ₹15 crore during the financial year 2015-16.

Justice Senthilkumar Ramamoorthy refused to set aside the penalty imposed by the I-T department since the actor had disclosed his additional income and paid taxes for it only pursuant to a search and seizure operation carried out by the sleuths on September 30, 2015 and not before that. He concluded the penalty order had been issued within the period of limitation prescribed under the Income Tax Act.

The judge, however, left it open to the writ petitioner to assail the penalty order before the appellate authority on grounds other than limitation since he had not gone into those grounds and dismissed the writ petition by rejecting the ground of limitation alone. Opposing the writ petition, the I-T department had argued the actor would not have disclosed the income but for the searches.

On the other hand, the Mr. Vijay’s counsel had contended the penalty proceedings were hit by the limitation period. Stating the proceedings must have been initiated on or before June 30, 2019 and not on June 30, 2022, he claimed, the limitation period would begin from the date when the Assessing Officer refers a matter to the Additional/Joint Commissioner of Income Tax.

Taking the judge through the facts of the case, I-T department senior standing counsel A.P. Srinivas told the court the I-T sleuths had conducted a search and seizure operation at the premises belonging to Mr. Vijay on September 30, 2015 and seized certain incriminating materials.

The materials indicated P.T. Selvakumar and Shibu of SKT Studios, producers of the actor’s 2015 movie Puli, had paid him ₹4.93 crore in cash apart from the remuneration of ₹16 crore through cheques. They had deposited the Tax Deducted at Source (TDS) only for the cheque amount and not the cash transaction.