The Income Tax (I-T) department on Tuesday strongly contested a petition filed by actor and Tamilaga Vettri Kazhagam (TVK) president, C. Joseph Vijay. He is challenging a ₹1.5 crore penalty imposed for failing to voluntarily declare an additional income of ₹15 crore during the 2015-16 financial year.
During proceedings before Justice C. Saravanan, who is overseeing Vijay’s 2022 writ petition against the penalty, senior standing counsel A.P. Srinivas for the I-T department asserted that the fine was correctly levied under Section 271AAB(1) of the I-T Act, and therefore, the actor’s petition should be dismissed.
The actor’s counsel, however, argued that the penalty proceedings were time-barred, claiming they should have begun by June 30, 2019, not June 30, 2022. In response, the judge requested the counsel to present a previous verdict he had delivered in a similar case concerning limitation periods by October 10, 2025.
Earlier, Mr. Srinivas elaborated on the petition’s history, stating that I-T officials had conducted a search and seizure operation at Mr. Vijay’s properties on September 30, 2015, where they confiscated incriminating documents.
These materials revealed that P.T. Selvakumar and Shibu from SKT Studios, producers of Vijay’s 2015 film Puli, had paid him ₹4.93 crore in cash, in addition to ₹16 crore via cheques. Notably, Tax Deducted at Source (TDS) was only remitted for the cheque payments, not for the substantial cash transaction.
Upon being presented with these records, the actor reportedly acknowledged receiving ₹5 crore in cash and consented to pay the corresponding taxes. When questioned about any other unaccounted income over the preceding six years, he stated that the ₹5 crore from Puli was his only undeclared cash receipt.
To demonstrate cooperation with the I-T department and facilitate an amicable resolution of the tax issues, Vijay voluntarily agreed to disclose an additional income of ₹15 crore (which included the ₹5 crore cash transaction) for the 2015-16 financial year and committed to paying all applicable taxes.
Following this, on July 29, 2016, he submitted his income tax return for the assessment year 2016-17, declaring a total income of ₹35.42 crore, which incorporated the additional ₹15 crore. In these returns, he also claimed depreciation on assets amounting to ₹17.81 lakh and sought an exemption for ₹64.71 lakh in fans’ club expenses.
However, the I-T department rejected these claims and issued an assessment order on December 30, 2017, setting the taxable income at ₹38.25 crore. The order explicitly noted that the actor would not have revealed the additional income had it not been for the initial search and seizure operation.
Consequently, the department imposed penalties under Sections 271(1)(c) and 271AAB(1) of the Income Tax Act. While Vijay pursued a statutory appeal against the assessment order and the penalty under Section 271(1)(c), only the penalty under Section 271AAB(1) became the subject of this specific writ petition.
When the writ petition was admitted on August 16, 2022, Justice Anita Sumanth initially prohibited the I-T department from recovering the penalty for a set duration. This interim order was then repeatedly extended, with Justice Abdul Quddhose confirming its continuation ’till further orders’ on February 21, 2023.
The writ petition was last heard in December 2023 and has now resurfaced on the cause list this Tuesday, as Justice Saravanan commenced final hearings on long-standing income tax cases.