For the financial years 2002-03, 2003-04 and 2004-05, Rajinikanth disclosed his income as Rs 61.12 lakh, Rs 1.75 crore and Rs 33.93 lakh respectively. However, I-T Department served notices and even conducted a survey at the Actor's Poes Garden residence suspecting concealment of income. Main allegation is that Rajinikanth has claimed a huge amount of professional expenditure apart from disclosing insignificant professional income. IT Officials found out that only 50 percent of expenditure was due to the Actor's professional activities and remaining 50 percent expenses were personal use. Later, A penalty of Rs 66.21 lakh was imposed on Thalaivar. Following which, Superstar approached the Tribunal and received a favourable outcome. Its then, I-T Department made tax case appeal in the Madras High Court.
Recently, The Central Board of Direct Taxes (CBDT) took the decision to drop legal proceedings in cases valued under Rs 1 crore. That is the reason Income Tax Department's Counsel M Swaminathan requested Justices Vineet Kothari and R Suresh Kumar to dismiss the appeals against Rajinikanth. This move was a relief for Superstar who is opposing the penalty right from the beginning.