Chennai, Feb 6 The Madras High Court on Friday dismissed a writ petition of TVK chief Vijay challenging an order of the Income Tax department directing him to pay Rs 1.50 crore penalty for alleged non-disclosure of his full income during 2015-16.
Justice Senthilkumar Ramamoorthy, dismissing the petition filed by the actor-politician, said the order imposing a penalty was within the time limit and hence, there was no infirmity warranting interference with the order.
Hence, the petition was dismissed, the judge added.
On a request made on behalf of Vijay by his counsel to grant liberty to challenge the order, the judge said it was open to the petitioner to assail the order before the appellate authority on grounds other than limitation.
The judge said: "I have not examined the other grounds on which the imposition of penalty was opposed by the petitioner or recorded findings thereon. It is left open to the petitioner to assail the impugned order before the appellate authority on grounds other than limitation."
The court said that in the replies of the petitioner to the notice dated December 11, 2018 under the I-T Act, the petitioner raised objections on multiple grounds. The first ground was that no incriminating documents were found or seized in course of search. The second ground was that the additional income of Rs 15 crore was voluntarily admitted and does not qualify as undisclosed income. The third ground was that the notice is invalid.
"Eventually, in course of arguments before this court, only the ground of limitation was argued by both the assessee and revenue (authorities). Therefore, only the question of limitation is being adjudicated herein."
The judge had on January 30 reserved orders after hearing the arguments from both sides.
In financial year (FY) 2015-16 (corresponding to assessment year --AY-- 2016-17), search proceedings were initiated against the petitioner on September 30, 2015.
The court said that action for the imposition of penalty was initiated in the assessment order dated December 30, 2017. If the said date is construed as the date of completion of proceedings, it falls within financial year 2017-18.
If limitation were to be reckoned on the basis of expiry of the financial year in which proceedings were completed, the last date for issuing the penalty order would be 31.03.2018. If determined on this basis, the penalty order dated 30.06.2022 would be beyond the period of limitation.
However, citing a relevant provision, the court said it enabled the period of limitation to be computed from the date on which the appellate order or the order of the appellate tribunal is received.
The starting point for such computation is the end of the month in which the order is received and the end date is 6 months from such date.
If determined on this basis, the order of the ITAT was issued on 22.12.2021 and could not have been received prior thereto. Considering December 22, 2021 as the date of receipt, the relevant month ended on 31.12.2021.
The 6 month period therefrom expired on 30.06.2022. The order imposing penalty was issued on 30.06.2022, which is the last date falling within the period of limitation computed on this basis.
For these reasons the court said it concluded that the order imposing penalty was issued within the period of limitation prescribed in Section 275(1)(a) of the I-T Act.
"Thus, I find no infirmity warranting interference. Therefore, the writ petition is dismissed without any order as to costs."
According to Vijay, he declared an income of Rs 35.42 crore for the financial year 2016-2017.
However, based on the documents seized during a search conducted by the Income Tax department at his residence in 2015, the department alleged that he had not disclosed an income of Rs 15 crore earned from the Tamil film "Puli".
Based on the findings, the department imposed a penalty of Rs 1.50 crore by an order dated June 30, 2022.
Assailing this order, Vijay filed the present petition and a single judge had on August 16, 2022 stayed the operation of the penalty order.
