The Madras High Court on Tuesday, adjourned by three weeks, a writ petition filed by actor C. Joseph Vijay last year, against an order passed by the Income Tax Department on June 30, 2022 imposing a penalty of ₹1.5 crore on him for not having voluntarily disclosed an additional income of ₹15 crore in the financial year 2015-16.
Justice Krishnan Ramasamy directed the High Court Registry to list the matter on October 30 after the petitioner’s counsel requested an adjournment. When the case was listed for admission on August 16, 2022, Justice Anita Sumanth had granted an interim injunction, restraining the I-T officials from recovering the penalty amount.
Thereafter, A.P. Srinivas, senior standing counsel for the I-T Department, filed a detailed counter affidavit explaining the reasons behind the imposition of the penalty. Subsequently, on February 21, 2023, Justice Abdul Quddhose ordered that the interim injunction, initially granted for a limited period, shall continue until further orders.
The penalty order had been passed subsequent to a search and seizure operation conducted by I-T sleuths with respect to the actor on September 30, 2015. During the course of the search, certain incriminating materials were seized, indicating that he had not disclosed his income in full while filing his returns.
The materials indicated that P.T. Selvakumar and Shibu of SKT Studios, producers of the actor’s 2015 movie ‘Puli’, had paid him ₹4.93 crore in cash apart from the remuneration of ₹16 crore through a cheque. Tax Deducted at Source (TDS) had been paid only for the cheque amount and not the cash transaction.
When the actor was confronted with the records, he reportedly admitted to have received ₹5 crore in cash and agreed to pay the taxes for it. However, while filing his I-T returns subsequently, he sought exemption for certain expenses such as ₹64.71 lakh spent for his fans club, leading to the levy of penalty.
Justice Sumanth however, had granted the interim injunction restraining the department from recovering the penalty amount on the prima facie ground that the penalty had been levied beyond the limitation period. The judge pointed out that the penalty ought to have been levied on or before June 30, 2019 as per Section 275(1) of the Income Tax Act, 1961.