Court Setback for Thalapathy Vijay as HC Upholds ₹1.5 Crore Tax Penalty
Court rules tax notice was issued within legal timeframe; actor politician free to move ITAT for further relief
Chennai, Feb 06 : Actor turned politician Thalapathy Vijay suffered a legal setback on Friday after the Madras High Court dismissed his writ petition challenging a ₹1.5 crore income tax penalty tied to the 2015–16 assessment year.
Vijay, who leads the Tamilaga Vettri Kazhagam (TVK), had approached the court seeking to quash an order by the Income Tax Department, which alleged that he failed to fully disclose additional income amounting to ₹15 crore. The undisclosed income reportedly surfaced during searches conducted at his residence in September 2015.
Delivering the verdict, Justice Senthilkumar Ramamoorthy held that the show cause notice issued by the tax authorities was legally valid and fell within the statutory time limit. The court confined its review to whether the penalty proceedings were initiated within the prescribed period and concluded that there was no procedural lapse under the Income Tax Act. As a result, other arguments presented by the actor were not examined.
Although the plea was rejected, the court granted Vijay the liberty to pursue the matter before the Income Tax Appellate Tribunal (ITAT). However, any challenge must exclude arguments related to delay or limitation, narrowing the scope of his potential appeal.
The case traces back nearly a decade. Following the 2015 searches, an assessment order was issued in December 2017, and penalty proceedings under Section 271AAB(1) began a year later. Vijay secured partial relief from the Commissioner of Income Tax (Appeals), but the department subsequently moved the ITAT, which upheld certain findings, including those related to expenses connected with the actor’s fan association.
Further developments unfolded in July 2019 when the department issued a notice under Section 263, arguing that penalty proceedings had not been properly initiated. The ITAT later set aside this notice in May 2022, observing that fresh action was unnecessary since the penalty process was already underway.
