Actor Vijay’s tax penalty case: Madras High Court reserves orders

The Madras High Court on Friday (January 23, 2026) reserved its orders on a writ petition filed by actor and Tamilaga Vettri Kazhagam (TVK) president C. Joseph Vijay in 2022 against imposition of a penalty of ₹1.5 crore on him by the Income Tax department for not having voluntarily disclosed an additional income of ₹15 crore during the financial year 2015-16.

Justice Senthilkumar Ramamoorthy deferred his verdict after hearing the petitioner’s counsel and I-T department senior standing counsel A.P. Srinivas who vehemently opposed the writ petition and contended that the penalty had been rightly imposed under Section 271AAB(1) of the I-T Act. The standing counsel urged the court to dismiss the actor’s writ petition.

In his arguments, the petitioner’s counsel contended the penalty proceedings were hit by the limitation period. Stating that the proceedings must have been initiated on or before June 30, 2019 and not on June 30, 2022, he claimed, the limitation period would begin from the date when the Assessing Officer refers a matter to the Additional/Joint Commissioner of Income Tax.

Taking the judge through the facts of the case, Mr. Srinivas told the court that the I-T sleuths had conducted a search and seizure operation at the premises belonging to Mr. Vijay on September 30, 2015 and seized certain incriminating materials.

The materials indicated that P.T. Selvakumar and Shibu of SKT Studios, producers of the actor’s 2015 movie Puli, had paid him ₹4.93 crore in cash apart from the remuneration of ₹16 crore through cheques. They had deposited the Tax Deducted at Source (TDS) only for the cheque amount and not the cash transaction.

When the actor was confronted with the records, he reportedly admitted to have received ₹5 crore in cash and agreed to pay the taxes for it. When asked how much of unaccounted income had the actor earned in the last six years, he replied he hadn’t received any unaccounted cash but for the ₹5 crore for Puli.

Nevertheless, in order to cooperate with the I-T department and to resolve the tax issues in an amicable manner, the actor agreed to disclose an additional income of ₹15 crore (including the cash transaction of ₹5 crore) for the financial year 2015-16 and pay the necessary taxes for it.

Subsequently, on July 29, 2016, he filed his return of income for the assessment year 2016-17 declaring his total income to be ₹35.42 crore including the additional ₹15 crore. While filing the returns, he claimed depreciation of assets worth ₹17.81 lakh and sought exemption for his fans’ club expenses of ₹64.71 lakh.

However, the department disallowed his claims and passed an assessment order on December 30, 2017, determining the taxable income to be ₹38.25 crore. The assessment order also stated the actor would not have disclosed the additional income but for the search and seizure operation.

Therefore, the department imposed penalty under Sections 271(1)(c) and 271AAB(1) of the I-T Act. Though, he chose to go on statutory appeal against the assessment order as well as the penalty imposed under Section 271(1)(c), the penalty under Section 271AAB(1) alone had been challenged by way of a writ petition.