Actor-politician Vijay, on Tuesday, September 23, approached the Madras High Court challenging the Rs 1.5 crore penalty imposed on him by the Income Tax (IT) Department in 2015 for allegedly concealing income during the financial year 2015–16.
Vijay had declared an income of Rs 35.42 crore for 2016-17. However, according to the IT department, he failed to disclose Rs 15 crore earned from the film Puli. The undisclosed income was allegedly revealed during a raid at his residence in 2015.
During the raid, officials reportedly found records indicating that the producers of Puli – PT Selvakumar and Shibu of SKT Studios – had paid Vijay Rs 4.93 crore in cash in addition to Rs 16 crore through cheque. Following questioning, Vijay admitted to the undeclared Rs 15 crore and agreed to pay taxes on it.
Subsequently, the department imposed a penalty of Rs 1.5 crore through an order dated June 30, 2022. Challenging this, Vijay, the founder of Tamilaga Vettri Kazhagam (TVK), argued that the order was time-barred and therefore invalid. Stating that the scope of Section 271AAB(1) of the Income Tax Act had been passed “beyond the period of limitation”, his counsel maintained that any penalty under the section ought to have been imposed before June 30, 2018.
Section 271AAB(1) of the Income Tax Act provides for a penalty on undisclosed income detected during a search, ranging from 10% to 90% depending on disclosure and compliance.
Earlier in 2022, the Madras High Court granted an interim stay on the penalty order. On Tuesday, Vijay’s counsel reiterated that the delayed order must be quashed.
Opposing this, the IT department asserted that the 2022 order was well within the legal time limit and should be upheld. “The penalty order is valid under the Income Tax Act and sustainable in a court of law. Hence, the petition should be dismissed,” the department submitted, according to The Times of India.
The court has adjourned the matter to October 10.