The Madras High Court has rescheduled the hearing of a writ petition filed by popular actor C. Joseph Vijay, commonly known as Vijay, pushing it to October 30, 2023. This petition, initiated in the preceding year, contests an order issued by the Income Tax Department on June 30, 2022, which imposed a substantial penalty of ₹1.5 crore on the actor. The penalty was levied based on the assertion that Vijay had neglected to voluntarily disclose an additional income of ₹15 crore for the financial year 2015-16.
Upon the request of the petitioner’s counsel, Justice Krishnan Ramasamy granted the adjournment. The case had already seen significant developments when, during its initial admission hearing on August 16, 2022, Justice Anita Sumanth had issued an interim injunction. This injunction prohibited Income Tax officials from pursuing the recovery of the penalty amount, indicating some prima facie merit in the case.
The roots of this financial penalty trace back to a search and seizure operation executed by Income Tax authorities on September 30, 2015, with respect to the actor. During this operation, a cache of incriminating materials was seized, suggesting that Vijay had not provided a full account of his income when filing his returns.
Intriguingly, these materials also indicated transactions involving P.T. Selvakumar and Shibu of SKT Studios, the producers of Vijay’s 2015 film “Puli.” According to the records, these producers had remunerated Vijay with ₹4.93 crore in cash, in addition to a substantial ₹16 crore via a cheque. An important note is that Tax Deducted at Source (TDS) was only applied to the cheque amount, completely excluding the cash transaction.
Upon being presented with these records, the actor allegedly acknowledged having received ₹5 crore in cash and committed to paying the corresponding taxes. However, discrepancies arose when Vijay filed his income tax returns, as he claimed exemptions for certain expenses, notably the ₹64.71 lakh spent on his fans’ club. This divergence led to the imposition of the penalty, giving rise to the legal challenge.
Crucially, Justice Sumanth’s decision to grant an interim injunction initially hinged on the fact that the penalty had been imposed beyond the statute of limitations. According to Section 275(1) of the Income Tax Act of 1961, the penalty should have been enforced on or before June 30, 2019.
The subsequent hearing scheduled for October 30, 2023, will provide the court with an opportunity to further deliberate on the case’s merits. Vijay’s legal team aims to contest the penalty order issued by the Income Tax Department and seek redress for their client.
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