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4 min readChennaiFeb 6, 2026 07:21 PM IST
The ruling brings to a close a legal battle that began in 2022, when Vijay moved the HC against a demand notice issued by the tax department. (File photo)
The Madras High Court on Friday dismissed a writ petition filed by actor-turned-politician Vijay, founder of the Tamilaga Vettri Kazhagam (TVK), challenging a Rs 1.5 crore penalty imposed by the Income Tax Department for not voluntarily disclosing an additional income of Rs 15 crore during the financial year 2015-16.
Justice Senthilkumar Ramamoorthy refused to set aside the penalty, concluding that the order had been issued within the period of limitation prescribed under the Income Tax Act and that the department’s action was legally valid. The court dismissed the petition after rejecting Vijay’s principal argument that the proceedings were time-barred.
The ruling brings to a close a legal battle that began in 2022, when Vijay moved the HC against a demand notice issued by the tax department. A single judge had earlier admitted the plea and granted an interim stay on August 16, 2022, temporarily suspending the operation of the penalty order.
The dispute traces back to a search and seizure operation conducted by Income Tax officials at Vijay’s premises on September 30, 2015. During the raid, officers seized documents that, according to the department, revealed income that had not been voluntarily disclosed.
Senior standing counsel for the department, A P Srinivas, told the court that the seized materials showed that the producers of Vijay’s 2015 film, Puli, had paid him Rs 4.93 crore in cash in addition to Rs 16 crore through cheques. Tax Deducted at Source (TDS) had been deposited only for the cheque component and not the cash transaction.
When confronted, Vijay reportedly admitted to receiving Rs 5 crore in cash and agreed to pay the taxes. Subsequently, “to cooperate with the department and resolve the tax issues in an amicable manner,” he agreed to disclose an additional income of Rs 15 crore for the year, including the cash component.
On July 29, 2016, he filed his income tax return for the assessment year 2016-17, declaring a total income of Rs 35.42 crore, which included the additional Rs 15 crore. He also claimed depreciation of Rs 17.81 lakh on assets and sought exemption of Rs 64.71 lakh toward fans’ club expenses.
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The department disallowed those claims and, through an assessment order dated December 30, 2017, revised the taxable income to Rs 38.25 crore. The order noted that the additional income would not have been disclosed “but for the search and seizure operation.” Based on these findings, the department imposed penalties under the Income Tax Act.
While Vijay pursued statutory appeals against some components, he challenged the penalty under Section 271AAB(1) through the present writ petition. Vijay’s counsel argued that the penalty proceedings were hit by limitation and should have been initiated on or before June 30, 2019, rather than on June 30, 2022. The limitation period, he contended, ought to run from the date the Assessing Officer referred the matter to higher authorities.
The department countered that the penalty had been imposed strictly in accordance with the Act and that the proceedings fell within the permissible timeframe. It further argued that the disclosure was not voluntary but prompted by the search.
Concurring with the department’s submissions, Justice Ramamoorthy upheld the validity of the penalty order. However, the court left it open for Vijay to challenge the order before the appropriate appellate authority on grounds other than limitation, since those issues were not examined in the writ proceedings.
Arun Janardhanan is an experienced and authoritative Tamil Nadu correspondent for The Indian Express. Based in the state, his reporting combines ground-level access with long-form clarity, offering readers a nuanced understanding of South India’s political, judicial, and cultural life - work that reflects both depth of expertise and sustained authority. Expertise Geographic Focus: As Tamil Nadu Correspondent focused on politics, crime, faith and disputes, Janardhanan has been also reporting extensively on Sri Lanka, producing a decade-long body of work on its elections, governance, and the aftermath of the Easter Sunday bombings through detailed stories and interviews. Key Coverage Areas: State Politics and Governance: Close reporting on the DMK and AIADMK, the emergence of new political actors such as actor Vijay’s TVK, internal party churn, Centre–State tensions, and the role of the Governor. Legal and Judicial Affairs: Consistent coverage of the Madras High Court, including religion-linked disputes and cases involving state authority and civil liberties. Investigations: Deep-dive series on landmark cases and unresolved questions, including the Tirupati encounter and the Rajiv Gandhi assassination, alongside multiple investigative series from Tamil Nadu. Culture, Society, and Crisis: Reporting on cultural organisations, language debates, and disaster coverage—from cyclones to prolonged monsoon emergencies—anchored in on-the-ground detail. His reporting has been recognised with the Ramnath Goenka Award for Excellence in Journalism. Beyond journalism, Janardhanan is also a screenwriter; his Malayalam feature film Aarkkariyam was released in 2021. ... Read More
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