Actor and politician Vijay recently filed an appeal before a Division Bench of the Madras High Court against a single judge`s recent ruling, which upheld a Rs 1.5 crore income tax penalty imposed on him.

Vijay appeals against Madras HC`s ruling

Vijay filed the appeal before a Division Bench after single-judge Justice Senthilkumar Ramamoorthy earlier dismissed Vijay’s petition, maintaining that the penalty order by the Income Tax Department was within the prescribed limitation period under the Income Tax Act.

Before the High Court`s single-judge, Vijay had confined his challenge exclusively to limitation. The TVK chief argued that the penalty order dated June 30, 2022, was time-barred under Section 275(1)(c). This prescribes a shorter six-month limitation period for “any other case.”

The single judge had rejected Vijay’s contention and upheld the penalty order. The Court noted that the ITAT order was issued on December 22, 2021, and thus, the six-month period expired on June 30, 2022, the very date on which the penalty order was passed.

It further concluded that the order was within limitation and found no infirmity warranting interference. Vijay has now challenged the single judge`s decision before the Division Bench. Although the appeal was filed in March 2026, it has yet to be processed for listing. 

About the case

The case arises from Vijay’s assessment for the financial year 2015–16 (assessment year 2016–17), which came after a search conducted by the Income Tax Department on September 30, 2015. During the search, Vijay admitted in a sworn statement that he received Rs 15 crore in cash as remuneration, in addition to Rs 16 crore through banking channels. This undisclosed income was subsequently included in his return.

The assessment proceedings also reviewed an expenditure head titled “Release and Rasigar Mandram Expenses,” under which Vijay claimed Rs 2.92 crore. According to his representative, Rs 2 crore was paid directly by the film’s producer to fan club members across Tamil Nadu and Puducherry, while Rs 92.44 lakh was paid in cash by Vijay.

The Assessing Officer did not allow the Rs 2 crore component for lack of proof and allowed only part of the cash expenditure. Upon appeal, the Commissioner of Income Tax (Appeals) granted the actor partial relief, while the Income Tax Appellate Tribunal ultimately allowed 50% of the total expenditure.

Additionally, penalty proceedings were separately initiated under Section 271AAB, which deals with penalties in search cases. The department also imposed a penalty of Rs 1.5 crore, which accounts to 10% of the admitted undisclosed income of Rs 15 crore.