H. BINITA BALI SINGHA,SILCHAR vs. INCOME TAX OFFICER, WARD-1, SILCHAR

Brief facts of the case as noted by the Assessing Officer is that the assessee is a practicing medical professional. The return of income for this relevant assessment year (AY 2011-12) was filed by the assessee on 12.10.2011 showing total income of Rs. 5,39,680/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (in short the Act) on 29.05.2012. Later the case was selected for scrutiny and the Assessing Officer issued notice u/s 143(2) of the Act and had served it up on the assessee. The Assessing Officer noted that the assessee has declared gross receipt of Rs. 7,78,639/-, and had shown total expenses of Rs. 2,16,000/- and net fees of Rs. 5,62,639/-. From the details of TDS (Form 26AS), it appeared to the Assessing Officer that the assessee had received fee from professional services amounting to Rs. 14,22,679/- from M/s ICICI Lombard General Insurance Co. Ltd., Mumbai during the financial year 2010-11. From the said discussion, according to Assessing Officer, the

Aggrieved the assessee preferred an appeal before the ld. CIT(A) who has confirmed the addition made by Assessing Officer.

Aggrieved the assessee is before me.

I have heard both the parties and perused the records. I note that the assessee is a doctor who serves the poor tribals in the North Eastern State of Assam (Cachar). It is noted that she has a contract for rendering service with M/s ICICI Lombard General Insurance Company (hereinafter referred to as “Insurance company”) and as per the agreement in the relevant assessment year, the assessee is remunerated for consultancy of a patient for a fees of Rs. 25/- only. And as per the agreement according to the assessee, she has to procure medicines for the patients whom she treats which will be reimbursed to her by the insurance company. So according to Ld. A.R Shri Anup Dutta, though the assessee received Rs. 13,10,357/- from M/s ICICI Lombard General Insurance Company Rs. 9,45,575/- she got as reimbursement for procuring medicine, and Rs. 1,73,232/- for the cost incurred by her for conducting laboratory test on the patients’ blood, urine etc. and Rs. 37,500/- was for incurring miscellaneous expenses and thus according to ld. A.R amount of Rs. 11,56,307/- was received by the assessee on account of reimbursement for purchase and distribution of medicine on behalf of the insurance company and the assessee’s remunerations was only to the tune of Rs. 1,54,050/- i.e. consultation fees of Rs. 25/- per patient. The breakup of the receipt and utilization is reproduced below as shown in Schedule I-III :

However according to ld. A.R when the Return of income (ROI) had to be However according to ld. A.R when the Return of income (ROI) had to be However according to ld. A.R when the Return of income (ROI) had to be filed, the assessee was pregnant and could not get correct professional advice, so an filed, the assessee was pregnant and could not get correct professional advice, so an filed, the assessee was pregnant and could not get correct professional advice, so an accountant without having any knowledge of Income accountant without having any knowledge of Income Tax Act, after taking note of the Tax Act, after taking note of the total receipt (which included the reimbursement of Rs. 11,56,307/ total receipt (which included the reimbursement of Rs. 11,56,307/ total receipt (which included the reimbursement of Rs. 11,56,307/-) filled up the column of ROI without stating the correct facts column of ROI without stating the correct facts, thus failed to reflect thus failed to reflect the correct remuneration that the assessee received and wrongly ret the assessee received and wrongly returned as income the urned as income the reimbursement of expenses on p of expenses on procurement of medicine etc. And when the assessee’s . And when the assessee’s case was taken up for scrutiny case was taken up for scrutiny, then the assessee was again erroneously again erroneously advised to stick to the ROI and all the answers given to Assessing Officer were stick to the ROI and all the answers given to Assessing Officer were stick to the ROI and all the answers given to Assessing Officer were to justify the returned income as incorrectly shown in the returned income as incorrectly shown in the ROI; and according to ld. A.R to ld. A.R since the ROI itself was erroneous from the inception, was erroneous from the inception, the Assessing Officer naturally could not the Assessing Officer naturally could not get convinced by the replies of assessee and made the addition get convinced by the replies of assessee and made the addition mainly mainly because the assessee could not reconcile the mismatches pointed out by the Assessing Officer assessee could not reconcile the mismatches pointed out by the Assessing Officer assessee could not reconcile the mismatches pointed out by the Assessing Officer with the returned income vis a vis Form 26AS the returned income vis a vis Form 26AS. On appeal also assessee failed to bring out failed to bring out

In the aforesaid background which is not again repeated for the sake of brevity, I note that when the ROI was filed by the assessee was pregnant and at an advanced stage and could not get proper professional advice while filing ROI, which led to the filing of ROI, with wrong inputs, which was the root cause of the impugned decision of Assessing Officer as well as ld. CIT(A). Since the assessee is a doctor who serves the socially weaker section of the society and in difficult hilly terrain for a modest fees of only Rs. 25/- per patient, the endeavor should be to find out her correct income which assessee received other than the reimbursement of the cost of medicine/lab expenses which she incurred on behalf of the insurance company. It is settled law that reimbursement of expenses (in this case the value of medicines, lab expenses etc.) cannot be treated as income. And it is trite law that even if an assessee shows more income in the assessee’s ROI, it need not be accepted as it is by the AO for various reasons. And even the assessment can be of framed for less income than what assessee

In the result, the appeal of the assessee is partly allowed for statistical purposes.