On 23 September 2025, the Income Tax (I-T) Department strongly opposed a writ petition filed by Tamilaga Vettri Kazhagam (TVK) president and actor C. Joseph Vijay in the Madras High Court. Vijay is challenging a ₹1.5 crore penalty imposed for failing to voluntarily disclose an additional ₹15 crore of income for the financial year 2015–16.
Representing the department before Justice C. Saravanan, senior standing counsel A.P. Srinivas argued that the penalty had been rightfully levied under Section 271AAB (1) of the Income Tax Act. He urged the court to dismiss the actor’s petition.
During the hearing, the actor’s counsel contended that the penalty proceedings were time-barred, stating they should have been initiated by 30 June 2019, but were only started on 30 June 2022. In response, the judge directed the petitioner’s lawyer to submit, by 10 October 2025, a copy of a judgment he had previously delivered in a similar case concerning limitation issues.
Providing context, Srinivas explained that a search and seizure operation had been conducted at Vijay’s premises on 30 September 2015. During the raid, evidence was found indicating that producers P.T. Selvakumar and Shibu of SKT Studios had paid the actor ₹4.93 crore in cash in addition to a ₹16 crore remuneration via cheque for the 2015 film Puli. Notably, TDS (Tax Deducted at Source) had only been applied to the cheque payment.
When confronted, Vijay reportedly admitted to receiving ₹5 crore in unaccounted cash and expressed his willingness to pay taxes on it. Although he claimed he hadn’t received any other unaccounted income over the prior six years, he agreed to declare an additional ₹15 crore for the 2015–16 financial year to resolve the matter amicably with the department.
On 29 July 2016, the actor filed his income tax return for assessment year 2016–17, declaring ₹35.42 crore as total income, which included the ₹15 crore additional disclosure. He also sought depreciation on assets worth ₹17.81 lakh and a deduction of ₹64.71 lakh for fan club-related expenses.
However, the tax authorities rejected these claims and issued an assessment order on 30 December 2017, determining the actor’s taxable income to be ₹38.25 crore. The order also observed that the additional income would not have been disclosed had the search operation not taken place.
Following this, penalties were imposed under Sections 271(1)(c) and 271AAB (1) of the I-T Act. While Vijay filed a statutory appeal against the assessment and the penalty under Section 271(1)(c), he approached the High Court via a writ petition solely to contest the penalty under Section 271AAB (1).
The writ was admitted on 16 August 2022, by Justice Anita Sumanth, who issued an interim stay on recovery of the penalty. This stay was extended from time to time, and on 21 February 2023, Justice Abdul Quddhose ordered that it remain in effect until further notice. After being last heard in December 2023, the case reappeared in the cause list on Tuesday as Justice Saravanan resumed hearings in long-pending income tax matters.
(With inputs from The Hindu)
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