The case pertains to additional income of Rs 15 crore which, according to the department, was not properly disclosed by the actor during the relevant financial year. The fine was imposed following income tax searches at his home in September 2015.
Vijay had approached the Supreme Court in 2022 against the criminal order. Justice Senthilkumar Ramamoorthy, who had reserved orders for the plea last month, pronounced the verdict on Friday.
The court found that the force majeure notice issued by the tax authorities fell within the period prescribed in Article 263 of the Income Tax Act and found that there were no procedural defects in its issuance. In view of this, the court refrained from examining other aspects of the case, in accordance with Live Law.
While dismissing the plea, the court granted liberty to Vijay to approach the Income Tax Appellate Tribunal (ITAT) to challenge the notice and penalty order on grounds other than restriction.
The case arose out of income tax searches conducted at Vijay’s residence in September 2015. An assessment order was subsequently issued in December 2017 and criminal proceedings under section 271AAB(1) were initiated in December 2018. Vijay challenged the assessment before the Income Tax Commissioner (Appeals), who partially ruled in his favour. The department later appealed to the ITAT, which also partially upheld its stand, including on certain expenses related to Vijay’s fan association.
In parallel, criminal proceedings continued in respect of Rs 15 crore surrendered during the search. In July 2019, the department issued a notice under Section 263 seeking review of the assessment, arguing that the penalty proceedings had not been properly initiated. However, the ITAT set aside this review in May 2022, noting that no further action was required once the criminal proceedings were already underway.
When the matter reached the High Court, the scope of inquiry was limited to whether the final writ of execution was issued within the limitation period under Section 275 of the Income Tax Act. In an interim phase, another bank had postponed collection of the penalty after initially noticing that the order appeared to have expired.
However, in its final ruling, the court found that the notice and proceedings were within the statutory period, paving the way for the Income Tax Department to enforce the fine.
– Ends
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