DR RAJ SINGH,CHENNAI vs. DCIT NON CORPORATE CIRCLE 7(1), CHENNAI

ITA 2564/CHNY/2026Status: DisposedITAT Chennai07 October 2026AY 2013-1417 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned addition of Rs. 34,54,000/- towards professional fees is not sustainable in law. The Tribunal noted that identical issues arising from the same search in Apollo Hospitals have been examined by co-ordinate benches in the cases of Dr. Sreenivasulu Reddy Ponnaluru, G. Ananthasubramaniam, and Srinivasan Bhaskar. In these cases, it was consistently held that the statement of Ms. G. Subhadra, Manager (Operations), did not establish the actual consultation fees charged or received by individual consultant doctors, as she had merely collected data without personal knowledge. Furthermore, the consultation fees of non-employee doctors were neither collected nor accounted for by Apollo Hospitals, and the figures relied upon were estimates without corroborative evidence. The Tribunal also found that the out-patient data included non-billed and non-charged patients. In the present case, the Assessing Officer did not present any independent or corroborative material to prove that the assessee received professional fees beyond what was disclosed. No incriminating material was found, books of account were not rejected, and no discrepancies were pointed out. The addition was made solely by applying an estimated consultation fee to the number of patients based on third-party information. Respectfully following the co-ordinate bench decisions, the Tribunal deleted the addition of Rs. 34,54,000/-. The legal grounds challenging the validity of reopening under Sections 147/148 were left undecided as the appeal succeeded on merits.

What were the facts?

The assessee, Dr. Raj Singh, filed his return of income for Assessment Year 2017-18 on September 17, 2013, declaring a total income of Rs. 15,33,262/-. The Revenue initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, issuing a notice under Section 148 on February 19, 2020, after observing from post-search proceedings at Apollo Hospitals that the assessee might not have accounted for consultation fees collected. The assessment was completed under Section 147 read with Section 143(3) on September 24, 2021, assessing an income of Rs. 49,87,262/- and making an addition of Rs. 34,54,000/- on account of professional fees. The Commissioner of Income Tax (Appeals) confirmed this addition. The assessee filed an appeal before the ITAT, noting a delay of 30 days which was condoned.

What were the issues?

1. Whether the notice issued under Section 147/148 of the Act is bad in law, particularly when information from a search is relied upon and the assessment should have been completed under Section 153C, especially considering the amendment to Section 153C effective from June 1, 2015, and the search conducted on January 29, 2018. (Mixed law and fact). 2. Whether the order passed by the Assessing Officer and the Ld. CIT(A) is a non-speaking order and ought to be quashed. (Law). 3. Whether the addition of Rs. 34,54,000/- on account of professional fees, based on estimated consultation charges from patient records of Apollo Hospitals, is sustainable in law when the assessee claims to have disclosed correct particulars and provided detailed patient-wise workings. (Mixed law and fact). Assessee's Contentions: The assessee argued that the issue is settled by co-ordinate benches in similar cases arising from the same search. They contended that the addition was made solely on the basis of information from Ms. G. Subhadra, who had no personal knowledge of actual fees charged, and that the hospital records included non-billed and non-charged patients. They relied on the decisions in Dr. Sreenivasalu Reddy Ponnaluru, G. Ananthasubramaniam, and Srinivasan Bhaskar. They also argued that the addition was based on conjecture and arbitrary rates without basis or cross-examination, and that the AO/CIT(A) failed to consider their explanations and detailed workings. The assessee also raised grounds challenging the validity of the reopening and the non-speaking nature of the orders, but these were not pressed. Revenue's Contentions: The revenue's contentions are not explicitly recorded in the judgment, other than the fact that the CIT(A) confirmed the addition, observing that the assessee failed to controvert the AO's findings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 153C,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

Hearing: 05.10.2026

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the Ld. CIT(A)"], dated 16.01.2026, confirming the assessment order passed u/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 ("the Act"), for the Assessment Year ("AY") 2017-18. 2. The Registry has noted a delay of 30 days in filing the present appeal

The order continues below.

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