Madras HC Upholds ₹1.5 Crore Income Tax Penalty on Actor Vijay, Holds Notice issued within Limitation Period
The High Court upheld the Rs. 1.5 crore penalty on actor-politician Vijay, holding the Income Tax notice and proceedings were within limitation
In a recent ruling, the Madras High Court upheld a Rs. 1.50 crore income tax penalty imposed on actor-turned-politician Vijay, and held that the Income Tax Department’s notice and proceedings were issued within the prescribed limitation period, allowing the penalty to stand.
Chandrasekaran Joseph Vijay (the petitioner) filed a writ petition challenging the penalty order relating to alleged non-disclosure of income for the financial year 2015-16. The case related to additional income of Rs. 15 crore which was not properly disclosed by him during the relevant period.
The dispute arose from income tax searches conducted at Vijay’s residence in September 2015. After this, an assessment order was passed in December 2017. Penalty proceedings were initiated.
The petitioner challenged the assessment before the Commissioner of Income Tax (Appeals), which partly ruled in his favour. The department then appealed before the ITAT which also partly upheld the department’s stand including on certain expenses linked to Vijay’s fan association.
Parallelly, penalty proceedings continued in relation to the Rs. 15 crore surrendered during the search. The department issued a notice seeking revision of the assessment, stating that penalty proceedings had not been properly initiated. The ITAT set aside this revision observing that no further action was required once penalty proceedings were already underway.
When the matter reached the High Court, the scope of examination was narrowed to whether the final penalty order was passed within the limitation period under Section 275 of the Income Tax Act. At an interim stage, another bench had stayed recovery of the penalty after prima facie observing that the order appeared time-barred.
In the final ruling (today), Justice Senthilkumar Ramamoorthy observed that the notice and proceedings were within the statutory time limit. Since limitation was the main issue before the Court, the Court refrained from examining other aspects of the penalty.
The court dismissed Vijay’s writ petition and upheld the Rs. 1.50 crore penalty. The court granted him liberty to approach the ITAT to challenge the notice and penalty order on grounds other than limitation.
The detailed final order/judgment has not been published yet.
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