Madras High Court Justice Senthilkumar Ramamoorthy dismissed actor and TVK leader Vijay's petition that challenged the Income Tax Department's decision to enforce a 1.5 crore penalty on him for his failure to voluntarily disclose that he had 15 crore in additional income in the 2015-16 financial year. The information about the actor only came out following an IT raid just ahead of the release of his film Puli. The dismissal means that the actor might have to pay the penalty.
The decision comes not long after the court reserved its judgement on the petition in January. Back then, AP Srinivas, the Income Tax Department's legal representative, strongly deferred to the claims in the petition, arguing that the actor had been appropriately penalised as per Section 271AAB(1) of the Income-Tax Act. Srinivas also encouraged the justice to dismiss Vijay's petition.
In his defense, Vijay's legal representative argued that the department's penalty proceedings preceded the mandatory time limit established by law. The lawyer claimed that the department must have started the proceedings on June 30, 2019 or before the date rather than June 30, 2022.
Meanwhile, Srinivas argued that the department seized some incriminating information following its operation at Vijay's premises on September 30, 2015. The information reportedly showed that Puli's producers, SKT Studios' Shibu and PT Selvakumar, had paid a liquid amount of 4.93 crore to Vijay, besides 16 crore as remuneration through cheques. Reportedly, tax had been deducted at source just for the cheque transaction and not the other transaction.
At the time, the actor disclosed the cash transaction amount and promised to pay the corresponding tax for it and said that he did not receive any other unaccounted money. Nonetheless, cooperating with the department and in a bid to amicably resolve the problems with tax, he revealed the 15 crore additional income, including the said cash transaction, for that financial year and agreed to pay the tax for it.
Later, he mentioned 35.42 crore, which included the said additional income, in the tax returns he filed for the next assessment year, where he also showed 17.81 lakh as asset depreciation and sought a 64.71 lakh exemption for fan club expenses. However, the IT Department deferred to his claims before passing an order in 2017, where they determined 38.25 crore as his taxable income. The order also said that Vijay would have kept the information about his additional income hidden if not the department's search and seizure operation. Consequently, the department decided to penalise the actor as per Sections 271(1)(c) and 271AAB(1) of the Income-Tax Act. The actor made an appeal against both the order and the penalty enforced as per Section 271(1)(c), but the petition challenged just the one imposed according to the other section.
The justice found that the department issued its penalty order inside the aforementioned time limit. At the same time, he has left it to the petitioner to challenge the order in front of the appellate authority based on factors other than the limitation thereof.
The latest development in the long-standing issue comes amid the censorship row over Vijay's final film, Jana Nayagan.
