Vijay Faces Setback As Court Rejects Appeal Against Rs 1.5 Crore Tax Penalty

In a setback for actor-politician Vijay (actor), who leads the Tamilaga Vettri Kazhagam (TVK), the Madras High Court has upheld a Rs 1.5 crore penalty imposed by the Income Tax Department and dismissed his petition challenging the levy. The verdict comes at a crucial time as Vijay prepares for his political debut.

Penalty Stems From 'Puli' Remuneration Probe

The case originates from a 2019 order by the Income Tax Department, which found that Vijay had suppressed income linked to his remuneration for the 2015 film Puli (2015 film). Searches conducted in 2015 allegedly revealed that out of a total remuneration of around Rs 15 crore, nearly Rs 5 crore was paid in cash and was not voluntarily disclosed in his original returns.

Following these findings, the department imposed a penalty of Rs 1.5 crore for non-disclosure of income.

Vijay Cited Delay In Proceedings

Challenging the order, Vijay approached the High Court arguing that the Income Tax Department had initiated and concluded penalty proceedings after an inordinate delay that went beyond the permissible statutory timeline. His counsel maintained that the delay alone was sufficient to invalidate the penalty.

The department countered by stating that the delay resulted from appellate proceedings arising out of the assessment and that the penalty was imposed strictly in accordance with the provisions of the Income Tax Act. It asserted that there was no procedural or legal infirmity in its action.

Court Sees No Reason For Judicial Interference

After hearing arguments from both sides, the High Court reserved its verdict on January 23 before dismissing Vijay's plea. The court held that the department's order imposing the penalty was valid and found no scope for judicial interference.

However, the bench noted that Vijay is free to approach the Income Tax Appellate Tribunal with a fresh prayer if he chooses to pursue the matter further.

Political Timing Draws Sharp Reactions

The ruling arrives at a sensitive moment as Vijay projects himself as a leader committed to clean governance and the eradication of corruption while stepping away from a lucrative acting career.

Neither Vijay nor TVK has issued a formal response to the verdict so far. However, someone from the party's core team said, "We will challenge this." Responding to questions on whether the ruling would dent Vijay's integrity, the source said, "No way. He had ultimately voluntarily disclosed the income and paid the tax."

The ruling Dravida Munnetra Kazhagam has refrained from an official comment. However, a source said, "This indictment by the High Court will speak volumes about his integrity. When it suits him, he will receive black money. What moral compass will he have to speak about corruption? He is a hypocrite of the first order."