Daijiworld Media Network - Chennai

Chennai, Feb 6: The Madras High Court on Friday dismissed a petition filed by actor-turned-politician Vijay challenging the Income Tax department’s order imposing a penalty of Rs 1.50 crore for alleged non-disclosure of income during the assessment year 2015–16.

Justice Senthilkumar Ramamoorthy rejected Vijay’s contention that the penalty proceedings were time-barred, holding that the order was passed within the limitation period prescribed 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 observed.

Stating that he found “no infirmity warranting interference” by the High Court, Justice Ramamoorthy dismissed the petition. However, he clarified that the court 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 on June 30, 2022, following a search conducted by the Income Tax department in 2015 at the premises of Vijay and SKT Producers. During the search, officials allegedly seized documents indicating 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 these findings, 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 at a later stage.

Vijay had earlier challenged the penalty order before the Commissioner of Income Tax (Appeals), who partly allowed his appeal. Subsequently, the Income Tax department moved the Income Tax Appellate Tribunal (ITAT), which partly allowed the department’s appeal, following which the penalty order was issued.

The actor-politician then approached the High Court in 2022, contending that the penalty proceedings were barred by limitation, following which 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 concluded by June 30, 2018, rendering the show-cause notice and penalty order invalid. However, senior standing counsel for the Income Tax department, Srinivas, countered the claim, stating that the penalty was imposed based on the ITAT’s 2021 order and within six months of that decision.