TaxTMI 
TaxTMI 
2023 (11) TMI 290
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....l consideration to the submissions made by the Ld. A.R. and Ld. CIT (DR) and reports of PCIT and the facts available on record. As regards Department's objection with regard to shortfall of Rs. 6,86,103/- in payment of additional taxes due to calculation of interest u/s 234A with a delay of 11 months in filing of return of income in response to notice u/s 153A of the Act issued on 26.11.2018, the argument of the A.R. that a fresh notice with specific time limit was issued on her oral/written request to the Department to enable the e-portal for filing returns is not convincing. During the hearing the A.R. could not produce any evidence 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 app....
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....ts was quantified at Rs. 25,22,23,809/-. Out of which a sum of Rs. 7.25 crores was accepted to be offered in the case of Dr.Maya Vedemurthy, Rs. 16.28 crores in the hands of M/s.RSV Skin and Laser Clinic and Rs. 1.68 Crores in the hands of Shri M.Vedamurthy. However, while filing the Settlement Applications before us, the applicants have claimed as under: i) Dr.Maya Vedamurthy: Out of receipt of Rs. 7.25 Crores, she has offered just 23% of the income i.e., Rs. 1.67 Crores and claimed 77% as expenses despite the fact that no such evidence was found during the search. ii) M/s.RSV Skin & Laser Clinic: Instead of Rs. 16.28 Crores, it has offered unaccounted 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 ....
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.... be satisfied on or before the date of making settlement application. Thus, the primary condition of payment of taxes is not satisfied by the applicant, Dr.Maya Vedamurthy, in the said application. Further, all the 3 applicants have failed to make full and true disclosure of their income. The applicants have failed to do so and not fulfilled the main requirements for admission of an application. Hence, all the Applications are not maintainable and are liable to be rejected on both the counts as in the 1st instance, the applicant, Dr.Maya Vedamurthy being the specified person and the other two applicants, M/s.RSV Skin & Laser Centre and Shri.M.Vedamurthy being related persons." 4. In the above 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 Hospita....
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....roach the Commission. Even in those cases, if the Commission allows an application to be proceeded with under Section 245D(1), yet upon receipt of the report, the application can be declared invalid under Sub-Section (2C) of Section 245D. In fact, the decision in Abdul Rahim (supra) is one such case. 19. ...... 20. To decide whether a contract is a composite contract or separate contracts, a deeper probe in to the factual scenario as well as the legal position is required. If such is the fact situation in the case on hand, the application of the 1st respondent/writ petitioner could not have been declared as invalid on account of failure to fully and truly disclose its income. Thus, what 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....
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....Senior Standing Counsel further adds that the consultation charges, which were received by the petitioners from Apollo Hospitals Enterprises Limited were also not added in the application filed for settling the cases before the Settlement Commission. 17. By way of rejoinder, the learned counsel for the petitioners would submit that in case this Court is inclined to allow the writ petition, it may fix the time for as the Interim Board for Settlement will cease to operate at the end of the year. 18. I have considered the arguments advanced by the learned counsel for the petitioners and the learned Senior Standing counsel for the respondents. 19. The petitioners in W.P.Nos.6482 and 6497 of 2020 are 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....
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....band and wife engaged in professions as doctors, lawyers, etc. The Commission has recommended that such cases should be exempt from the operation of the provision. The Government has accepted this suggestion and the provision has been suitably modified.". 24. Therefore, to begin with, splitting and fragmenting of unaccounted amounts between the petitioners was in conceivable as the petitioners in W.P.Nos.6482 and 6497 of 2020 although are husband and wife, they are not capable of entering into a partnership arrangement for medical services. Therefore, there is no scope for settling the case on the facts of the case. 25. Facts further indicate that a search is said to have been taken place on 01.03.2018 at Maya 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-....
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....2,371 - 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 5,81,31,811 Additional income offered before the 1^st respondent, Settlement Commission 1,66,93,121 1,93,06,658 88,77,800 25,22,23,809 Total 7,25,78,789 16,28,91,020 1,67,54,000 4,48,77,579 percentage 22.99% 11.85% 52.98% 17.79% 30. Thus, against the total unaccounted gross receipt of Rs. 25,22,23,809/- unearthed during search, is to be offered to tax. Instead, these petitioners have offered only Rs. 4,48,77,579 out of the aforesaid gross receipt of Rs. 25,22,23,809/-. It shows that the petitioners have failed to pay tax on the unaccounted income and are recalcitrant and have shown no remorse after indulging in evasion tax. 31. 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 ....