The Madras High Court has reserved orders on actor and Tamilaga Vettri Kazhagam founder Vijay’s plea challenging a Rs 1.5 crore income tax penalty for alleged non-disclosure of income during the 2015-16 assessment year. Justice Senthilkumar Ramamoorthy fixed date.
CHENNAI: The Madras High Court has reserved its decision on a plea filed by actor and founder of Tamilaga Vettri Kazhagam (TVK), Vijay, contesting a penalty of 1.5 crores imposed by the income tax department for allegedly failing to disclose his actual income during the 2015-16 assessment period.
Following the conclusion of the final hearing, Justice Senthilkumar Ramamoorthy set a date to issue his order.
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Factual Background Of the Case:
Actor-turned-politician C. Joseph Vijay is contesting a Rs 1.5 crore penalty imposed by the Income Tax Department, anchoring his defence on a crucial procedural point that the penalty order was issued beyond the legally permissible time limit. The controversy traces back to September 2015, when tax officials conducted a search at Vijay’s premises in connection with inquiries relating to his film Puli.
During the search, authorities alleged that Vijay had failed to disclose income amounting to nearly Rs 15 crore, comprising approximately Rs 4.93 crore in cash and Rs 16 crore received through cheques, with tax deducted only on the cheque payments. Vijay later disclosed the entire sum in his 2016–17 income tax return, while also claiming deductions towards depreciation and fan-club expenses, some of which were subsequently rejected by the department.
On this basis, the tax authorities levied penalties under Sections 271(1)(c) and 271AAB(1) of the Income Tax Act, contending that the income disclosure was a consequence of the search operation and not a voluntary declaration. Vijay has specifically challenged the penalty imposed under Section 271AAB(1) by filing a writ petition before the Madras High Court.
His legal team argues that the penalty order, passed in 2022, is invalid as it was issued after the statutory limitation period, which, according to them, lapsed in 2019. The High Court granted an interim stay on recovery of the penalty, which has been extended on multiple occasions. Justice C. Saravanan, who is hearing the matter, has directed Vijay’s counsel to place relevant judicial precedents on limitation before the court. The case is now listed for further hearing on October 10, 2025.
Vijay reported an income of 35.42 crores for the financial year 2016-17. However, the income tax department claimed that he did not report an additional 15 crores earned from the film “Puli,” based on documents seized during a raid at his home in 2015.
On August 16, 2022, a single judge admitted the plea and granted an interim stay on the operation of the department’s order. Vijay argued that the penalty should have been levied before June 30, 2019, and since the order was issued late, it should be annulled. In opposition, the department maintained that the penalty imposed on Vijay was valid under the Income Tax Act, urging that his petition be dismissed.
Case Title: C Joseph Vijay v. The Deputy Commissioner of Income Tax and others Case No: WP No. 21006 of 2022
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