Tomato leaf curl Palampur virus (ToLCPalV) is a whitefly-transmitted, bipartite begomovirus. Here, we demonstrated that ectopic expression of AV2 from a Potato virus X (PVX)-based vector accelerated systemic necrosis and reactive oxygen species (ROS) accumulation in Nicotiana benthamiana. Furthermore, 10 amino acids from N-terminal region of AV2 were found to be associated with the systemic necrosis symptom/phenotype. Mutational studies of ToLCPalV infectious clones lacking the AV2 revealed that AV2 is essential for the systemic movement of DNA-A, symptom severity and viral DNA accumulation. In a yeast two-hybrid assay, Catalase2 (Cat2) was found to associate with AV2 protein. Further, silencing of Cat2 resulted in appearance of necrotic lesions on N. benthamiana and these plants were highly susceptible to ToLCPalV infection in comparison to control plants. Infection ToLCPalV on Solanum lycopersicum resulted in downregulation of Cat2 transcripts, followed by accumulation of ROS and stress marker transcripts. The AV2 protein also suppressed virus-induced gene silencing (VIGS) of the Phytoene desaturase (PDS) gene. Our results show that AV2 is essential for the pathogenicity, systemic movement and suppression of gene silencing in the host. Altogether, our findings suggest that interactions between AV2 and Cat2 might play a crucial role in the establishment of ToLCPalV infection.