In a setback to actor and Tamilaga Vettri Kazhagam (TVK) president Vijay, the Madras High Court on Friday dismissed his plea challenging a penalty of Rs 1.5 crore imposed by the Income Tax Department for undisclosed income relating to the financial year 2015–16.
Justice Senthilkumar Ramamurthy found no infirmity in the penalty notice and declined to interfere, holding that Vijay had disclosed the additional income and paid taxes only after a search and seizure operation conducted by Income Tax officials in September 2015. The Court also ruled that the notice had been issued within the statutory limitation period prescribed under the Income Tax Act.
However, the Court granted liberty to the actor to challenge the penalty order before the Income Tax Appellate Tribunal on grounds other than limitation. The writ petition was dismissed solely on the issue of limitation.
The case pertains to alleged tax evasion connected with the Tamil film Puli (2015), which marked the return of veteran actress Sridevi to Tamil cinema and was her last film before her death.
Counsel for the Income Tax Department submitted that search and seizure operations conducted at Vijay’s premises on September 30, 2015 yielded incriminating documents. The Department found that the actor had received Rs 4.93 crore in cash and Rs 16 crore by cheque from the producers of Puli. While tax was deducted at source for the cheque payments, no TDS was deposited for the cash component.
When confronted with the evidence, Vijay reportedly admitted to receiving Rs 5 crore in cash and agreed to pay tax on it. Subsequently, to resolve the matter, he disclosed additional income of Rs 15 crore for the financial year 2015–16, which included the cash transaction, and paid the applicable taxes.
In his income tax return filed in July 2016, Vijay declared a total income of Rs 35.42 crore, including the additional amount. He also claimed depreciation on assets worth Rs 17.81 lakh and sought exemption for fan club expenses amounting to Rs 64.71 lakh. Disallowing these claims, the Department assessed his taxable income at Rs 38.25 crore in its order dated December 30, 2017 and imposed the penalty.