The Madras High Court has dismissed a writ petition filed by actor-turned-politician Joseph Vijay, popularly known as Vijay, challenging a penalty of ₹1.5 crore imposed on him by the Income Tax Department for alleged non-disclosure of income during the financial year 2015–16. The court, in an order delivered by Justice Senthilkumar Ramamoorthy, upheld the department’s penalty order after finding that the show-cause notice issued to Vijay was within the statutory time limit prescribed under the Income Tax Act. The judge held that there was no legal infirmity in the notice’s issuance, and on that basis declined to interfere with the penalty order, without going into the other contested aspects of the case.
The penalty matter traces back to a series of proceedings initiated after income tax searches were conducted at Vijay’s residence in September 2015. Following those searches, the department alleged that Vijay had undisclosed income of approximately ₹15 crore for the year in question, including amounts received for remuneration in connection with his work in the Tamil film Puli. In response, Vijay had earlier approached the Commissioner of Income Tax (Appeals), which partly allowed his challenge, but the department then appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT partly upheld the department’s contentions, including on specific expense claims linked to Vijay’s fan association. Penalty proceedings under Section 271AAB(1) of the Income Tax Act were pursued in relation to the undisclosed income, culminating in the penalty order dated June 30, 2022.
Vijay’s petition before the High Court, filed in 2022, argued among other things that the penalty proceedings were time-barred under the limitation provisions of the Act. At an earlier stage in the litigation, the High Court had granted interim protection against recovery of the penalty on a prima facie view that limitation might be an issue. In its final order, however, the court determined that the show-cause notice and ensuing penalty order were issued within the permissible timeframe under the relevant statutory provisions and that therefore there was no basis to invalidate the penalty on limitation grounds. In doing so, the court found no “infirmity warranting interference” with the penalty order.
While dismissing Vijay’s writ challenge, the Madras High Court granted him liberty to pursue available remedies before the appellate authorities. The court clarified that Vijay remains free to assail the show-cause notice or the penalty order before the Income Tax Appellate Tribunal or other appellate forums on grounds other than limitation. The ruling upholds the Income Tax Department’s authority to levy the penalty and confirms that the procedural timelines in this case were correctly adhered to by the tax authorities. The outcome is a legal setback for Vijay in his long-running tax dispute, even as he retains the option to contest substantive aspects of the penalty through appellate channels.
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