Madras HC to deliver verdict on TVK chief Vijay’s Rs 1.5 cr I-T penalty tomorrow
Justice Senthilkumar Ramamoorthy will rule on the case dating back to a 2015 search linked to the actor-politician’s film 'Puli'
Amid uncertainty over the release date of his reportedly final film as an actor, Jana Nayagan, Tamilaga Vettri Kazhagam (TVK) president Vijay is set to face a key legal moment on Friday (February 6) when the Madras High Court pronounces its judgment in his long-pending challenge against a Rs 1.5 crore penalty imposed by the income tax (I-T) department.
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Justice Senthilkumar Ramamoorthy is scheduled to deliver the verdict at 10:30 am. Presided over by him, the court had reserved orders on the case on January 23, following final arguments.
Case dates back to Sept 2015
The case dates back to a September 30, 2015, search and seizure operation conducted by the I-T department at Vijay's premises and those linked to the producers of his high-budget fantasy-adventure film Puli, which was released the very next day.
Vijay's decade-old case
- Actor-turned-politician faces a crucial legal moment on February 6 as the Madras HC delivers its verdict on his challenge to a Rs 1.5 crore income-tax penalty linked to a long-running case.
- The case began with a 2015 I-T raid connected to his film Puli, where authorities found he was paid about Rs 21 crore, including nearly Rs 5 crore in cash on which no tax was deducted.
- Vijay admitted receiving the cash and disclosed Rs 15 crore as additional income, filing returns that showed total income of Rs 35.42 crore, though the department later reassessed it at Rs 38.25 crore.
- The I-T department imposed penalties, saying the disclosure wasn’t voluntary but forced by the search; Vijay challenged the Rs 1.5 crore penalty in 2022, arguing it was time-barred and procedurally flawed.
- The case has gained extra attention because Vijay has entered politics now and is gearing up for the Tamil Nadu elections 2026
Documents seized reportedly revealed that producers P T Selvakumar and Shibu Thameens paid Vijay a total remuneration of approximately Rs 21 crore — Rs 16 crore via cheque (with TDS deductions) and Rs 4.93 crore in cash, on which no tax was withheld.
Vijay agreed to disclose additional Rs 15 cr
During the search, Vijay admitted to receiving the cash component and stated he had no other unaccounted income in the preceding six years. To cooperate, he agreed to disclose an additional Rs 15 crore as income for the financial year 2015-16. He filed his return for assessment year 2016-17 on July 29, 2016, declaring a total income of Rs 35.42 crore.
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The department, however, disallowed certain claims (including depreciation on assets and exemptions for fans' club expenses) and passed an assessment order on December 30, 2017, determining taxable income at Rs 38.25 crore.
Claims and counterclaims
It concluded that the additional disclosure was made only because of the search, not voluntarily, and imposed penalties under Sections 271(1)(c) and 271AAB(1) of the Income Tax Act. In 2022, Vijay challenged the Rs 1.5 crore penalty under Section 271AAB(1), specifically for search-related undisclosed income, through a writ petition.
A senior counsel representing Vijay contended that the I-T department's penalty order dated June 30, 2022, was passed well beyond the statutory limitation period under Section 275 of the Income Tax Act.
It was argued that the proceedings should have concluded by June 30, 2019, making the 2022 order invalid and liable to be quashed. The petition emphasised procedural lapses and questioned the department's delay.
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Senior standing counsel A P Srinivas strongly defended the penalty, asserting there was no flaw in the June 2022 order. The department maintained that Vijay's additional disclosure of Rs 15 crore was not voluntary but compelled by the search, justifying the levy under Section 271AAB(1). It urged the court to dismiss the petition, insisting the order was legally sound and within permissible bounds.
During the 2015 search, Vijay cooperated fully, admitting the cash receipt and voluntarily agreeing to disclose the additional income to regularise his returns. He has consistently maintained that he is a law-abiding, high tax-paying citizen with no intent to conceal income.
Case catches headlines as Vijay forays into politics
The case has drawn attention not only for its financial implications but also as it coincides with Vijay's full-time transition into politics after announcing his retirement from acting.
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Fans and observers are eagerly awaiting Friday's verdict, which could bring closure to an 11-year-old tax dispute stemming from Puli, one of Vijay's most ambitious but commercially underwhelming films.