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TMI Blog2023 (11) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... unted income and are recalcitrant and have shown no remorse after indulging in evasion tax. Cumulatively, these petitioners have offered only 17.79% of the gross receipt for tax before the first respondent Settlement Commission. Thus, it is clear that the petitioners have not made and full and true disclosure of the income before the first respondent, Income tax Settlement Commission . The impugned order records that during the search, meticulous accounts of the daily collection sheet containing the details of names of patients, date of collection, heads of collection and amount collected were seized from the applicant s business premises which indicated receipts received in cash and through cards for the Assessment Years 2012-13 to 2018-19. These collection sheets/folders also contain the details of investment made in immovable properties including unaccounted investment thereon. In these sheets as well as in other documents found during the search, no details of any unaccounted expenditure were found. Application before the first respondent, Settlement Commission is expected to be made in good faith with full true and disclosure. Merely because, a portion is offered w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to show that after the receipt of the manual notice u/s 153A on 26.11.2018, the applicant had made any attempts to request the Assessing Officer to enable her to file the e-return. The Chartered Accountant of the applicant claims to have orally requested the A.O. but there is no proof of the same. In any case, we fail to understand as to why would the A.O. not enable the e-portal for filing of the return by the applicant. It is clear from the mail sent by the CA of the applicant that he had approached the Department only on 24.09.2019 when the applicant wanted to approach the Settlement Commission. The A.R.'s argument that in the notice issued u/s 153A dated 22.10.2019, there was no mention of any reference to the manual notice issued by the Revenue does not matter because in the e-mail sent by the CA of the applicant to the A.O., he himself has clearly mentioned about the manual notice issued by the Department and requested the Department that the applicant is unable to comply with the manual notice and requested the Revenue to do the needful to enable her to file the return. Thus the applicant tried to shift the blame of not filing the return for almost a year on the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naccounted income of Rs. 10.73 Crores and on which it has claimed 82% of expenses. Thus it has offered just Rs. 1.93 Crores as its income. Regarding Rs. 5.56 Crores not offered by the applicant, it stated that:- (a) Rs. 3.06 Crores has been offered in the return of income filed for the Assessment Year 20182019 for both the applicant as well as Dr.Maya Vedamurthy. This is very strange because all along the applicant has been stating that from the Assessment Year 2015-2016, the income of the clinic has been offered in the applicant Firm and not in the hands of Dr.Maya Vedamurthy. On being questioned during the hearing, the applicant had no answer to justify this claim and thus it is clear that this income of Rs. 3.06 Crores clearly evidenced from the impounded documents has not been offered by the applicant. (b) As regards the balance of Rs. 2.50 Crores of discrepancy found in the fee receipts, the applicant has simply stated that it is covered under the total disclosure without justifying how and where. During the hearing, when the A.R. was questioned on the same, he could not justify this exclusion and simply stated that there are expenses against this income without giving a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... background, application were filed by these petitioners before the first respondent, Income Tax Settlement Commission on 27.12.2019 under Section 245D(1) of Income Tax Act, 1961. By the impugned common order dated 27.02.2020 passed under Section 245D(2C) of the Income Tax Act, 1961, the application filed by these petitioners under Section 245D of the IT Act on 27.12.2019 have been dismissed. 5. It appears that the petitioner in W.P.No.6497 of 2020 was earlier consulting in Apollo Hospital Enterprises Limited in Chennai. Later, the petitioner in W.P.No.6553 of 2020 was conceived along with her husband, the writ petitioner in W.P.No.6482 of 2020 on 09.02.2013. It appears that after the petitioner in W.P.No.6553 of 2020 was conceived, the petitioner in W.P.No.6497 of 2020, confined herself to consulting in the hospital run by these two petitioners in W.P.Nos.6482 and 6497 of 2020, the petitioner firm in W.P.No.6553 of 2020. 6. By an order dated 09.01.2020 passed under Section 245D(1) of Income Tax Act, 1961, the applications filed by these petitioners were allowed to be proceeded further for the Assessment Years involved i.e., 2012-2013 to 2018-2019. A report dated 12.02.2020 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required to be done in the instant case was to allow the application to be proceeded with under Section 245D(2C) and take up the matter for consideration under Section 245D(4) and take a decision after adjudicating the claim. 9. It is submitted that there is no scope for dismissing the application based on the report filed under Section 245D(2B) read with Rule 6 of the Income Tax Settlement Commission (Procedure) Rules, 1997. It is submitted that whether the petitioners are indeed to settle their cases eventually or not has to be adjudicated by the first respondent Settlement Commission under Sub-Section 4 of Section 245D (4) of the Income Tax Act, 1961. 10. It is therefore submitted that the impugned order is liable to be set aside and the case is remitted back to the Interim Board for Settlement, which has been constituted, pursuant to the abolition of the Settlement Commission vide Finance Act, 2021, by way of insertion of Section 245A(a) of the IT Act, with effect from 01.02.2021. 11. Mr.A.P.Srinivas, learned Senior Standing Counsel for the respondents on the other hand would submit that there is no dispute regarding unaccounted professional receipts of Rs. 25,22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husband and wife respectively. They are partners of the writ petitioner in W.P.No.6553 of 2020 which appears to have been started during Financial Year 2014-15. The petitioner in W.P.No.6482 of 2020 is the Managing Partner of the petitioner in W.P.No.6553 of 2020. 20. The petitioner in W.P.No.6497 of 2020 is a medical professional, a specialist in Dermatology, Laser Treatment and Aesthetic Medicines. The petitioner in W.P.No.6497 of 2020 was earlier consulting in Apollo Hospital Enterprises Limited. 21. The petitioner in W.P.No.6482 of 2020 who is the Managing Partner of the petitioner in W.P.No.6553 of 2020 does not appear to be a medical professional. Therefore, the Juristic relationship between the petitioners in W.P.Nos.6482 and 6497 of 2020 as partners of the petitioner in W.P.No.6553 of 2020 is inconceivable in law. 22. In Commissioner Of Income-Tax, .vs.Dr.K.K.Shah , (1982) 28 CTR Guj 126, 1982 135 ITR 146 Guj, the Court rightly observed as follows:- It must also be realised that a doctor-husband cannot form a partnership with a wife who is not a doctor in order to carry on his profession. The rules of professional ethics would not permit this. It would be un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foundation. Pursuant to the search, the Department concluded that the petitioner in W.P.No.6497 of 2020 had an undisclosed income for a sum of Rs. 25,22,23,809/-, which was not accounted for while filing returns. A parallel search is also said to have taken place at the premises of Apollo Hospital Enterprises Limited. 26. It appears that the petitioner in W.P.No.6497 of 2020 was earlier facing a proceeding under Section 148 of the IT Act for the Assessment Year 2011-2012 to 2014-2015 for unaccounted income received from Apollo Hospital for the consulting there. The said petitioner was therefore issued with the following notices/show cause notice under Section 148 of the Income Tax Act, 196 for Assessment Year 2012-13 to 2018-19 : - Sl.No Assessment Year Date of Notice under Section 148 Show Cause Notice 1 2011-12 21.03.2018 - 2 2012-13 21.03.2018 10.12.2019 3 2013-14 09.03.2018 10.12.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Settlement Commission, as detailed below:- W.P.No.6497 of 2020 W.P.No.6553 of 2020 W.P.no.6482 of 2020 F.Y. Dr.Maya Vedamurthy M/s.RSV Skin Laser Centre M.Vedamurthy Total 2011-12 1,65,71,416 - 20,96,000 1,86,67,416 2012-13 2,87,95,002 - 20,17,000 3,08,12,002 2013-14 2,72,12,371 - 24,07,000 2,96,19,371 2014-15 - 3,52,85,937 27,34,000 3,80,19,937 2015-16 - 3,70,84,659 25,00,000 3,95,84,659 2016-17 - 3,48,88,613 25,00,000 3,73,88,613 2017-18 - 5,56,31,811 25,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute with the department by giving an opportunity to a defaulting assessee to make a clean breast of all the past lies and misdeeds by giving an opportunity to pay tax that was not paid earlier together with interest. 36. The facts also indicate that the petitioner in W.P.No.6497 of 2020, Dr.Maya Vedamurthy was a consultant with Apollo Hospital Enterprises Limited and had been issued with notices under Section 148 of the Income Tax Act, 1961 as detailed above and has admitted to the default committed by her. 37. Merely because, an order dated 27.12.2019 under Section 145D(i) of the Income Tax Act, 1961 was passed and the application was allowed to be proceeded, i pso facto would not mean the Settlement Commission has to proceed by ignoring the report filed under Rule 6 of the Income Tax Settlement Rules by the Income Tax Department in response to order under Section 245D(2B) of the Income Tax Act, 1961 . 38. That apart, as mentioned above, there was no scope for fragmenting the gross receipts in the hands of three petitioners, as the petitioners in W.P.Nos.6482 and 6497 of 2020 cannot be partners in medical service although they are husband and wife as the petitioner in W. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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