The Madras High Court, on Tuesday, August 16, passed an interim order staying the Income Tax department’s order passed on June 30, which imposed a fine of Rs 1.5 crore on actor Vijay for undisclosed income. According to the I-T department, the actor did not voluntarily disclose information about an additional income to the tune of Rs 15 crore in the financial year 2015-16.

Justice Anita Sumanth passed the stay order while hearing a petition filed by the actor seeking to quash the penalty. The department had conducted raids at the actor’s residence on September 30, 2015, following which Vijay had filed I-T returns for the year 2016-17 declaring that his total income was Rs 35,42,91,890, including the amount of Rs 15 crore.

Meanwhile, the counsel for the actor contended that the penalty imposed on Vijay under section 271AAB(1) of the Income Tax Act, should have been imposed before June 30, 2018 and so questioned the validity of the notice issued by the I-T department.

According to the petition filed by actor Vijay in court, the I-T officials – during their search and seizure – in 2015, recovered documents indicating that the actor received an amount of Rs 5 crore in cash apart from the remuneration of Rs 16 crore (in cheque) that he got for the film ‘Puli’. The officials said that tax was paid for the cheque but not for the cash. The actor had also reportedly admitted to receiving Rs 5 crore in cash and also agreed to pay the taxes for the same. However, the officials had questioned him on the amount of unaccounted income he obtained in the last six years, to which Vijay had responded in the negative.

“However, in order to cooperate with the department in an amicable manner, I admit an additional income of Rs 10 crores for the current financial year 2015-16. This is in addition to Rs 5 crore as already admitted by me on account of cash remuneration received for the film ‘Puli’,” he had said to the department and agreed to pay the necessary taxes for Rs 15 crore of unaccounted income.

Following this, the actor filed his returns on July 29, 2016, declaring his total income to be Rs 35.43 crore and claimed depreciation of assets and sought exemption for expenses incurred for his fans club. However, the department states that the claims were disallowed and passed an assessment order fixing the taxable income to be Rs 38.25 crore.

However, in his petition, the actor has contended that the assessment order was taken for an appeal before the Commissioner of Income Tax in 2018, and another appeal was made by the department before the Income Tax Appellate Tribunal (ITAT) in 2021.

Following this, penalty proceedings were initiated under Section 271(1)(c) of the Income Tax Act leading to levy of penalty of Rs 1.5 crore and hence he had approached the High Court challenging such penalty.

The judge directed the Income Tax department senior standing counsel A P Srinivas to take notice and ensure that a counter affidavit to the actor's writ petition was filed by September 16.