W.P.Nos.12692 of 2022 etc. batch

IN THE HIGH COURT OF JUDICATURE AT MADRAS

Reserved on:11.08.2022

Pronounced on: 01.09.2022

CORAM

THE HONOURABLE DR. JUSTICE ANITA SUMANTH

W.P.Nos.12692, 14810, 14829, 14833, 15384, 19632, 19634, 19637, 14515,

14592, 14897, 14979, 14993, 15082, 15084, 15268, 15276, 15281, 15289,

15304, 15317, 15365, 15386, 15388, 15448, 15452, 15455, 15458, 15721 &

15079, 15995 of 2022 and

WMP.Nos.14469, 14470, 14472, 14545, 14596, 14597, 14598, 18952,

18955, 18957, 14035, 14036, 14038, 14040, 14042, 14104, 14106, 14108,

14200, 14203, 14205, 14215, 14216, 14217, 14295, 14296, 14298, 14299,

14300, 14301, 14433, 14436, 14437, 14450, 14451, 14452, 14455, 14456,

14457, 14462, 14465, 14466, 14482, 14483, 14484, 14516, 14517, 14518,

14536, 14537, 14538, 14539, 14540, 14541, 14543, 14544, 14601, 14602,

14603, 14606, 14608, 14609, 14612, 14613, 14614, 12143, 14978, 14980,

15315, 15318, 15320, 18956, 18942, 18944, 18946, 18948, 18949, 19568,

14007, 14008, 14033, 12146, 12147, 13716, 13717, 13718, 13788, 13789,

13790, 14289, 14290, 14006 & 14976 of 2022

WP.No.12692 of 2022:

Dr.Mathew Cherian,

C-5, Parsn’s Royal Bungalow, Sesh Nestle,

Nanjundapuram,

Coimbatore – 641 036.

... Petitioner

Vs

The Assistant Commissioner of Income Tax,

Non Corporate Circle-4,

Main Building,

63, Race Course Road,

Coimbatore – 641 018.

... Respondent

1

https://www.mhc.tn.gov.in/judis

W.P.Nos.12692 of 2022 etc. batch

PRAYER: Writ Petition filed under Article 226 of the Constitution of India

praying to issue a Writ of Certiorari, to call for the records of the Respondent in

PAN: AAMPC8266C and quash the impugned Order under section 148A(d) of

the Income Tax Act, 1961, dated 12.04.2022 in DIN & Notice

No:ITBA/AST/F/148A/2022-23/1042709932(1), and the consequential notice

u/s.148 of the Act dated 12.04.2022 in DIN & Notice

No:ITBA/AST/S/148_1/2022-23/1-1042714624(1) for the Assessment year

2018-19.

(In all WPs)

For Petitioners

: Mr.AL.Somayaji, Senior Counsel

for Mr.R.Vijayaraghavan

for M/s.Subbaraya Aiyar Padmanabhan

(In all WPs except WP.No.15995 of 2022)

For Respondents

: Mr.A.P.Srinivas, Senior Standing Counsel

and

Mr.ANR.Jayaprathap, Junior Standing Counsel

(In WP.No.15995 of 2022)

For Respondent

: Mrs.HemaMuralikrishnan, Senior Standing Counsel

C O M M O N O R D E R

This batch of Writ Petitions has been filed at the instance of several

doctors specializing in different areas of medicine, who challenge proceedings

for re-assessment in terms of Section 147 and 148 of the Income Tax Act, 1961

(in short ‘Act’).

2

https://www.mhc.tn.gov.in/judis

W.P.Nos.12692 of 2022 etc. batch

2. There was a survey in Kovai Medical Centre and Hospital (in short

KMCH or hospital) by the officials of the Income Tax Department, on

22.11.2021. In the course of the survey, various documents were found and

seized that, according to the respondents, are incriminating as they point to the

existence of an employer –employee relationship inter se the parties.

3. The documents include ‘employee confidentiality agreement’, ‘revised

guidelines for practice of medicine at KMCH’ and joining reports, all of which

lead the officers to suspect that the doctors were employed with the hospital and

were not visiting consultants.

4. On the basis of the above documents and consequent inferences, the

authorities have come to a conclusion that (i) employer-employee relationship is

established (ii) petitioners are to be construed as employees and not full

time/visiting consultants and (iii) the income returned by them has to be

assessed under the head ‘salary’ and not ‘professional income’.

5. The impugned orders relate to assessment year (in short ‘AY’) 2018-

19. A show cause notice was issued on various dates under clause (b) of Section

148A of the Income Tax Act, 1961. The notice was accompanied by an

annexure setting out the reasons on the basis of which the Department was