PRAKASH CHAND JAIN,CHENNAI V. DCIT, CENTRAL CIRCLE-2(3), CHENNAI

ITA 62/CHNY/2024

AI Insights

The case involves multiple appeals by Prakashchand Jain, a doctor employed at Apollo Hospital, against the orders of the Commissioner of Income Tax (Appeals), Chennai, which confirmed the additions made by the A.O for the Assessment Years 2013-14 to 2019-20. The additions were based on undisclosed income from OP consultation charges and disallowances for non-deduction of TDS on interest payments. The Tribunal dismissed the appeals, agreeing with the CIT(A) that the additions were justified based on the materials seized during the search and subsequent verifications with Apollo Hospital. The Tribunal also rejected the assessee's argument that the proceedings should have been initiated under section 153C instead of section 153A, affirming the A.O's jurisdiction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39020 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Other Referred Cases: Shri Palladam Krishnasamy Ganeshwar v. DCIT, DCIT vs. ITC Ltd, Sterling Machine Tools vs. CIT, Sundaram Pillai vs Pattabiraman, Abisar Buildwell (P.) Ltd. vs. 143 taxmann.com 399 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R. CLEMENT RAMESH KUMAR
• Assessee Lawyers: N. ARJUN RAJ
• Keywords: TDS; Right to appeal; Agreed addition
• Section: 132; 153A; 40(a)(ia)

Judgement Text

" आयकर अपीलीय अिधकरण, ’सी’ \u0010ा यपीठ, चे\u0015ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C BENCH: CHENNAI \u0018ी एबी टी. वक\u001e, \u0010ा ियक सद एवं \u0018ी जगदीश, लेखा सद क े सम' BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos. 59, 62, 63, 65, 67, 69 & 74/Chny/2024 िनधा=रण वष= /Assessment Years: 2013-14 , 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 Prakashchand Jain, 39 and 40 Bakers Street, Choolai, Chennai – 600 112. Vs. The Dy. Commissioner of Income Tax, Central Circle-2(3), Chennai. [PAN: AHHPP 1690D] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीलाथ\u001e की ओर से/ Appellant by : Shri N. Arjun Raj, Advocate KLथ\u001e की ओर से /Respondent by : Shri R. Clement Ramesh Kumar, CIT सुनवाई की तारीख/Date of Hearing : 10.12.2024 घोषणा की तारीख /Date of Pronouncement : 31.01.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid seven appeals filed by the assessee for Assessment Year (AYs) 2013-14 to 2019-20 arises out of the identical orders of Learned Commissioner of Income Tax, Appeal, Chennai-19 [hereinafter “CIT(A)”] dated 31.05.2022. ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 2 -: 2. There is a delay of 529 days in filing these appeals by the assessee. The assessee has filed condonation petition stating the circumstances and reasons for delay in filing the appeals. We have considered the petition of delay in filing the appeals and satisfied that there was sufficient cause for not filing the appeals within the prescribed time limit. Hence, the delay is condoned accordingly. 3. The facts in all the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal in ITA No.59/Chny/2024 for A.Y 2013-14 as lead case. 4. The assessee in all the appeals have raised the ground of appeal in confirming the jurisdiction u/s. 153A of the Act by the A.O and sustaining the addition of consultation fee and addition on account of disallowances u/s. 40(a)(ia) of the Income-tax Act, 1961 (hereinafter “the Act”). 5. The assessee is a Doctor employed in Apollo Hospital, Chennai and also doing practice as OP consultation in the hospital. A search and seizure action u/s. 132 of the Act was conducted at the residential premises at 39 & 40, Bakers Street, Choolai, Chennai of assessee on ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 3 -: 08.06.2018. During the course of search at the residential premises of the assessee, a paper cover containing details of cash received from OP consultation was found and seized vide Annexure ANN/AKG/JPC/LS-S. The A.O on the basis of search conducted has initiated assessment proceedings u/s. 153A of the Act. The A.O, pursuant to the seized material has made enquiry with the CEO of the hospital and the hospital submitted the excel sheet containing details of out-patients consulted and fee collected as under: Sl. No F.Y. Consultation visit/New@ Rs.1000/- Consultation Follow up visit/Old@ Rs.500/- Total OP consultation fee received. 1. 2016-17 2658*1000= Rs.25,68,000/- 724*500= Rs.3,62,000/- Rs.29,30,000/- 2 2017-18 1845*1000= Rs. 18,45,000/- 528*500= Rs.2,64,000/- Rs. 21,09,000/- 3. 2018-19 1064*1000= Rs.10,64,000/- 782*500= Rs.3,91,000/- Rs.14.55.000/- Total Rs.64,94,000/- 6. The A.O further has information in his possession for F.Y 2012- 13 to 2015-16: Sl. No F.Y. Consultation visit/New@ Rs.1000/- Consultation Follow up visit/Old@Rs.5 00/- Total OP consultation fee received. 1 2012-13 809*1000= Rs.8,09,000/- 1777*500= Rs.8,88,500/- Rs.16,97,500/- 2 2013-14 905*1000= Rs.9,05,000/- 1702*500= Rs.8,51,000/- Rs. 17,56,000/- 3 2014-15 2542*1000= Rs.25,42,000/- 1028*500= Rs.5,14,000/- Rs.30,56,000/- 4 2015-16 2537*1000= Rs.25,37,000/- 532*500= Rs.2,66,000/- Rs.28,03,000/- Total Rs. 1,05,75,500/- ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 4 -: 7. The A.O based on the above information has made addition on OP consultation fee not disclosed in the return of income of Rs.16,97,500/- in A.Y 2013-14. The A.O has also made disallowance u/s. 40(a)(ia) of the Act of Rs.60,000/- in reference to interest amount of Rs. 60,000/- paid to his wife on which TDS was not deducted. The assessee in response to show cause issued by A.O regarding OP consultation charges from M/s. Apollo Hospital has accepted the receipt of OP charges in toto vide his submission dated 28.01.2021 and 08.02.2 before the AO. The A.O accordingly made addition of OP consultation of Rs 16,97,500/- in order u/s 153A in A.Y 2013-14 . The A.O has also made addition on account of disallowances u/s 40(a)(ia) of the Act of Rs 60,000/- as assessee has not deducted TDS on the interest of Rs 60,000/- paid to his wife. Though the assessee has filed appeal before the Ld. CIT(A) against the agreed addition, he has not pressed the ground of addition on OP consultation fee . The assessee before Ld CIT(A) has submitted that though he has accepted the OP consultation fee as given by the Apollo Hospital, Chennai to the Officers of the Department, he understands now that the authorities of the hospital after verification of the figure have reworked the correct income and intimated the same to the Department and he is not pressing this ground. The Ld. CIT(A) therefore, confirmed the ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 5 -: addition. As regard to disallowance of Rs. 60,000/- u/s. 40(a)(ia) of the Act , Ld CIT(A) has confirmed the addition rejecting the assessee’s arguments that above addition is not based on search material , so no addition can be made in order u/s 153A holding it statutory disallowances . Now assessee has filled appeal against the order of Ld CIT(A) . 8. The Ld. AR has argued that a search was conducted in the premises of M/s. Apollo Hospital Enterprises Ltd. at Greams Road, Chennai on 05.01.2016 and the A.O has used the material seized in the premises of M/s. Apollo Hospital Enterprises Ltd, therefore order passed under section 153A is without jurisdiction. The Ld. AR has argued that the A.O has used the material at the time of search conducted in the premises of Apollo Hospital Enterprises therefore, proceedings should have been started in the case of the assessee u/s. 153C of the Act. The Ld. AR has submitted that during the course of search, only details of consultation charges from OPD of Rs. 6,900/- for A.Y 2019-20 has been seized and therefore, addition cannot be made in other years. The Ld. AR has also challenged the OP consultation rate provided by Apollo Hospital based on which addition has been made. The Ld. AR has also relied on the order of ITAT. ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 6 -: Chennai in the case of Shri Palladam Krishnasamy Ganeshwar v. DCIT in ITA No.1222-1225/Chny/2024, whether addition of OPD fee has been deleted. As regard to addition u/s 40(a)(ia) of Rs 60,000, Ld AR reiterated that addition is not based on search material , therefore not sustainable in order u/s 153A. 9. The Ld. Departmental Representative, on the other hand, has argued that a search has been conducted in the case of the assessee and therefore, jurisdiction u/s. 153A of the Act cannot be challenged. The Ld. DR also submitted that during the course of search, documents of OP consultation fee was found and seized and assessee has accepted the OP consultation charges. The A.O during the A.Y has also made enquiry from Apollo Hospital which has given the details of OP consultation received by the Doctor. As the addition has been made on the basis of search material and subsequent enquiry made from Apollo Hospital, the addition should be sustained. The Ld. DR also submitted that the assessee before the A.O has accepted the addition of OP consultation charges and has not pressed this ground before the Ld. CIT(A) therefore, has no right to agitate before the ITAT by the doctrine of estoppels. ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 7 -: 10. We have heard the rival submissions, and perused the materials available on record. A search was conducted in the case of the assessee on 08.06.2018 and a paper cover containing details of cash received from OP consultation in a day was found and seized. The document when confronted to the assessee, the assessee has accepted that the paper contains the details of fee received in cash and he has not shown OP consultation charges received in cash in the return of income. The assessee has further admitted that this money is used to meet his lifestyle expenses for various household expenses etc. and offered a sum of Rs. 50 Lakhs as undisclosed income from OP consultation charges for all the previous year put together. The A.O in order to verify the exact quantum of fee made enquiry from the Apollo Hospital. The Apollo Hospital submitted the details of OP consultation fee received by the assessee and the A.O has made the addition on the basis of such enquiry after confronting to the assessee. The assessee before the A.O has admitted the consultation fee as per the show cause notice and has not pressed the ground before Ld. CIT(A) stating that though he has accepted the OP consultation fee as given by the Apollo Hospital, Chennai to the Officers of the Department, he understands now that the authorities of the hospital after verification of the figure have reworked the correct income and ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 8 -: intimated the same to the Department and is not pressing the ground. The Hon’ble Supreme Court in the case of DCIT vs. ITC Ltd (1996) 222 ITR 551 (SC) has held that when an assessee does not dispute an addition during assessment and accepts it voluntarily, they are deemed to have waived their right to appeal . The Hon’ble Delhi High Court in the case of Sterling Machine Tools vs. CIT (1980) 123 ITR 181 (Del) has ruled that when an assessee has agreed to a particular addition during assessment, they cannot later turn around and contest it in appeal unless they prove that their acceptance was under coercion, mistake of law or misrepresentation. The Hon’ble Supreme Court in the case of Sundaram Pillai vs Pattabiraman (1985) 1 SCC 591 (SC) has explained that estoppels applies when a party makes a representation by words or conduct and induces another party to act upon it. In taxation matters, a taxpayer who has voluntary accepted an addition cannot later take a contrary position. Therefore, once assessee has accepted the addition and has not contested it before the CIT(A) they cannot raise the issue at ITAT stage. 11. As regard to challenge of jurisdiction u/s 153A , search has been conducted at the assessee’s premises from whether seized papers in the form of daily collection of OP consultation has been found. The ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 9 -: assessee during the search has accepted the authenticity of the documents and also offered sum of Rs. 50 Lakhs as undisclosed income from OP consultation charges for all years. As per Section 153A of the Act, where search has been initiated u/s 132 of the Act, the A.O is mandated to issue notice u/s 153A of the Act and assess the total income as per provision of the Act. Therefore arguments of Ld. AR is rejected. 12. As regard to Ld. AR’s arguments that addition is not based on the seized material, the A.O had in his possession incriminating material to the effect that assessee has received OP consultation charges in cash and same has not been disclosed in the return of income. The A.O has made enquiry from Apollo hospital on the basis of above incriminating material and assessee has accepted the total amount of undisclosed receipt. The Hon’ble Supreme Court in the case of Abisar Buildwell (P.) Ltd. 143 taxmann.com 399 (SC) has settled the issue that once search has been conducted, and incriminating material has been found during the course of search, the A.O has jurisdiction to assess the total income. In view of the above, the appeal filed by the assessee for A.Y 20-13-14 is dismissed. ITA No.59, 62, 63, 65, 67, 69 & 74/Chny/2024 :- 10 -: 13. We find that the identical issues are involved in assessee’s appeals for A.Ys 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 & 2019-20 also and accordingly, our adjudication above in A.Y 2013-14 is mutatis mutandis applies therein also. Therefore, for the similar reasons, we dismiss the appeals in ITA Nos.62, 63, 65, 67, 69 & 74/Chny/2024 as well. 14. In the result, the appeals filed by the assessee in ITA Nos.59, 62, 63, 65, 67, 69 & 74/Chny/2024 are dismissed. Order pronounced on 31st January, 2025. Sd/- Sd/- (एबी टी. वक\u001e) (ABY. T. Varkey) \u0010ाियक सद / Judicial Member (जगदीश) (Jagadish) लेखा सद /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 31st January, 2025. EDN/- आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. \t थ\b/Respondent 3. आयकर आयु\u0010/CIT, Chennai 4. िवभागीय \tितिनिध/DR 5. गाड\u0019 फाईल/GF "