Reassessment initiated on statement of hospital manager that doctor didn’t disclose full consultancy fees held valid

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Reassessment initiated on statement of hospital manager that doctor didn’t disclose full consultancy fees held valid

Dr. Sajan Hedge v. ACIT – [2021] 129 taxmann.com 215 (Madras)
Short Overview of the case:
Income Tax survey and search is often a time of interesting finding and revelation.
Statement of the person during the survey is often plays an important role during the course of assessment. Though there are the cases wherein it is held that the statement recorded during survey dont have any evidentiary value in absence of corroborative evidence,s till it  is a material with the department.
The present case is a case of assessee who was an ortho-pediatrician and surgeon.
A reopening notice was issued on the ground of the statement of person who was manager in the Hospital in which the assessee was practicing.
 In the recorded statement, the manager stated that based on the number of patients visited, income from consultation fees received by assessee from hospital practice was much more than what was shown by him.
Assessee submitted that the copy of the manager’s statement was not enclosed along with the show cause notice issued.
The revenue pointed out that even presuming it was not enclosed, the assessee had not sought the copy immediately.
Even in the letter sent subsequently, there was no mention regarding furnishing of the said statement.
 However, the said statement was subsequently handed over to the authorized representative of assessee.
 Assessee filed a writ to seek further opportunity to submit elaborate objections.
On writ, Madras High Court held that quashing the reassessment proceedings and providing an opportunity to submit further objections would cause prejudice to the revenue.
Contrarily, assessee may be permitted to submit all his further objections based on the statement, enabling AO to proceed with the assessment or reassessment.
Thus, instead of quashing the entire proceedings, it was sufficient if an opportunity was provided to assessee to submit additional objections.

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