Actor Vijay’s tax penalty case: Madras High Court dismisses his plea

Justice Senthilkumar Ramamoorthy said the IT department had issued the show cause notice “within the two-year limitation period prescribed under Section 263 of the Income Tax Act,” adding that he did not find any legal infirmity in the issuance of the notice and declined to examine the merits of the penalty proceedings.

Section 263 of the Income Tax Act, 1961, empowers the principal commissioner or commissioner to revise assessment orders passed by an Assessing Officer (AO) if they are deemed “erroneous” and “prejudicial to the interests of the revenue.”

The court, however, granted liberty to Vijay to challenge the notice and the consequential penalty order before the Income Tax Appellate Tribunal (ITAT) on grounds other than limitation.