The assessment order also stated that the actor would not have disclosed the additional income but for the search and seizure operation. File | Photo credit: The Hindu
The Madras High Court on Friday (January 23, 2026) reserved its orders on a writ petition filed by actor and Tamilaga Vettri Kazhagam (TVK) president C. Joseph Vijay in 2022 against the imposition of a penalty of ₹1.5 million by the Income Tax Department for not voluntarily disclosing additional income of ₹5 during the financial year. 2015-16.
Justice Senthilkumar Ramamoorthy reserved his verdict after hearing the petitioner’s counsel and IT department standing counsel AP Srinivas, who vehemently opposed the court’s motion and argued that the punishment was imposed correctly under Section 271AAB(1) of the IT Act. The permanent advocate urged the court to dismiss the actor’s lawsuit.
Counsel for the petitioner argued in his argument that the criminal proceedings were barred by limitation. He submitted that the proceedings had to be initiated on or before 30 June 2019 and not 30 June 2022, the period of limitation would start running from the date the Assessing Officer referred the matter to the Additional/Joint Commissioner of Income Tax.
Taking the facts of the case to the judge, Mr. Srinivas told the court that on September 30, 2015, IT sleuths conducted a search and seizure at the premises belonging to Mr. Vijay and seized certain incriminating materials.
The materials indicated that PT Selvakumar and Shibu of SKT Studios, the producers of the actor’s 2015 film Puli, paid him ₹4.93 crore in cash besides a remuneration of ₹16 crore through cheques. They levied tax deducted at source (TDS) only on check amount and not on cash transaction.
When confronted about the records, the actor reportedly admitted that he received ₹5 million in cash and agreed to pay taxes on it. When asked how much unaccounted income the actor earned in the last six years, he said that he did not get any unaccounted cash, except ₹5 crore for Puli.
However, in order to cooperate with the IT department and resolve the tax issues amicably, the actor agreed to disclose an additional income of ₹15 crore (including a cash transaction of ₹5 crore) for the financial year 2015-16 and pay the necessary taxes on it.
Subsequently, on 29 July 2016, he filed his return of income for the assessment year 2016–17 and stated that his total income was ₹35.42 crore including an additional ₹15 crore. While filing his return, he claimed depreciation on assets worth ₹17.81 crore and claimed exemption on his fan club expenses of ₹64.71 crore.
However, the department rejected his claims and issued an assessment order on 30 December 2017, fixing the taxable income at ₹38.25 crore. The assessment order also stated that the actor would not have disclosed the additional income but for the search and seizure operation.
The department therefore imposed a fine according to § 271 paragraph 1 letter c) and § 271AAB paragraph 1 of the IT Act. Although he decided to file a legal appeal against the assessment order and against the penalty imposed pursuant to § 271 paragraph 1 letter c), the sentence itself according to § 271AAB paragraph 1 was challenged by a written action.
Published – 23 Jan 2026 21:40 IST
