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TMI Blog2022 (11) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... ints of limited scrutiny - As the case of the Assessee was selected for limited scrutiny and the addition in hand does not emanate from the grounds on which the case of the Assessee was picked up for limited scrutiny. Though the Ld. Commissioner, in the impugned order incorporated the legal contention of the Assessee objecting to the jurisdiction of the Assessing Officer to extend the assessment proceedings beyond the points of limited scrutiny, but the ld. Commissioner has not adverted to decide this contention of Assessee in the impugned order. As it is settled law that the Revenue Authorities are not allowed to travel beyond the issues involved in limited scrutiny cases, except in exceptional circumstances and by completing the relevant formalities before proceeding to other issues, which in the instant case does not appears to have adhered to. Hence, we deem it appropriate to delete the addition in hand. Consequently, the appeal of the Assessee is liable to be allowed. - ITA No. 6118/Del/2019 - - - Dated:- 28-11-2022 - SHRI PRADIP KUMAR KEDIA , ACCOUNTANT MEMBER AND SHRI N. K. CHOUDHRY , JUDICIAL MEMBER Appellant by : Sh. Atul Puri, Ld. Adv. Respondent by : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. Commissioner and on merit claimed as under: That the Assessee had hired a marketing agency to improve the business, better management of the patients, co-ordination of the surgeries to improve efficiency and counselling of the patients. The payments made to this agency were through banking channels after deducting tax at source. The Assessing Officer had not doubted the genuineness of such payments, but has disallowed the same by misunderstanding the facts of the case misinterpreting this amount as referral fee paid to other doctors, diagnostic centres etc., which is banned by Indian Medical Association, whereas even a fraction of this amount paid and disallowed by the Assessing Officer was not paid to any doctor, diagnostic Lab or chemist or any other party engaged in any medical related activity. Therefore, the treatment of professional fee as referral fee is based on assumptions and presumptions of the Assessing Officer, which cannot be sustained under law. 3.1 The Assessee before the Ld. Commissioner also raised the legal issue by submitting as under: That as per notice u/s. 142(1) of the Act and questionnaire attached therewith, the case of Assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful consideration to the orders passed by the authorities below. On merit of the case, we observe, as it clearly appears in the assessment order, that the Assessee vide reply dated 25.08.2017 tried to substantiate the amount of Rs.4,80,000/- debited to the Profit Loss Account under the head commission paid to others , which reads as under : a) The Assessee is a Doctor/Surgeon by profession. Looking the circumstances of the competitive market and to be retained in practice have to make various expenses to generate new cases. The Assessee had made payments towards commission and deducted proper tax at source. (Copy of TDS certificate enclosed). b) Copy of Income Tax return of the recipient of commission is also enclosed. Furthermore, the commission is paid purely for the purpose of the business and looking the ground of the case it is pleased before your goodself that the commission expenses may please be allowed. (Highlighted by us for reference) 5.1 However, during the appeal proceedings before the ld. Commissioner, the Assessee changed his stand by claiming that the Assessee had hired a marketing agency, Karanjeet Thukral HUF, to improve the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment between the Medical practitioner and the commission agent is not only unlawful but also void as per Contract Act. 5.3 The Hon ble Apex Court in the case of M/S Apex Laboratories P. Ltd. vs The Deputy Commissioner Of Income ... on 22 February, 2022 Indian Kanoon - http://indiankanoon.org/doc/43893743/ 12 also reminded as under: 27. It is also a settled principle of law that no court will lend its aid to a party that roots its cause of action in an immoral or illegal act (ex dolomalo non oritur action) meaning that none should be allowed to profit from any wrongdoing coupled with the fact that statutory regimes should be coherent and not self- defeating. Doctors and pharmacists being complementary and supplementary to each other in the medical profession, a comprehensive view must be adopted to regulate their conduct in view of the contemporary statutory regimes and regulations. Therefore, denial of the tax benefit cannot be construed as penalizing the assessee pharmaceutical company. Only its participation in what is plainly an action prohibited by law, precludes the Assessee from claiming it as a deductible expenditure. 5.4 It is the also mandate of law that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopt pick and choose. True facts ought to be disclosed as the Court knows law, but not facts. Suppression or concealment of material facts is impermissible to a litigant. The Court is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a Court, he must do equity and place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the petitioner or twisted facts have been placed before the Court, the Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 5.6 In the instant case it is a undisputed fact that the Assessee himself had debited the amount of Rs.4,80,000/- to the Profit Loss Account under the head commission paid to others and by filling reply dated 25.08.2017 in the assessment proceedings tried to justify/substantiate the said claim of commission paid to others . However before the Ld. Commissioner in appeal changed its stand and also claimed that the Assessing Officer had made addition by completely misunderstanding and misinterpreting the facts of the case. It is not the case of the Assessee that the Assessee inadvertently o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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