CHENNAI: The Madras High Court on Friday dismissed a petition filed by actor-politician Vijay challenging the Income Tax department’s order imposing a penalty of Rs 1.50 crore for non-disclosure of income during the assessment year 2015–16.
Justice Senthilkumar Ramamoorthy rejected the petition after holding that the penalty order was passed within the prescribed limitation period under the Income Tax Act.“For reasons aforesaid, I conclude the order imposing penalty was issued within the period of limitation under section 275 (1) (a) of the Income Tax Act,” the judge said in his order.
He further stated that he found “no infirmity warranting interference” by the court and dismissed the petition. However, the judge clarified that he had not examined other grounds raised against the penalty and left it open for Vijay to challenge the order before the appellate authority on grounds other than limitation.
The penalty was imposed by the Income Tax department on June 30, 2022, following a search conducted in 2015 at the premises of Vijay and SKT producers. During the search, officials seized documents allegedly showing receipt of Rs 4.93 crore in cash in addition to a cheque payment of Rs 16 crore from the producers, which was not disclosed in the accounts. Based on this, the department imposed a penalty of Rs 1.50 crore for non-disclosure of about Rs 5 crore and another Rs 10 crore shown as income later.
Vijay had challenged the penalty order, and the Commissioner of Income Tax (Appeals) had partly allowed his appeal. The Income Tax department later moved the Income Tax Appellate Tribunal, which partly allowed the department’s appeal. Following this, the penalty order was passed.
The actor turned politician then approached the High Court in 2022, arguing that the penalty proceedings were time-barred, and an interim stay was granted.
During the hearing, Vijay’s counsel argued that since the assessment was completed on December 30, 2017, the penalty proceedings should have been completed by June 30, 2018, making the show cause notice and penalty order invalid. However, senior standing counsel for the Income Tax department, Srinivas, rejected the claim, stating that the penalty was imposed based on the 2021 ITAT order and within six months of that order.