S.GURUSHANKAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner is the Chairman of the Meenakshi Mission Hospital and Research Centre, Madurai. He had stated in the affidavit that the then Finance Minister, Government of India, on 29.02.2008, in the budget speech, had announced that a new sub Section (11C) is proposed to be inserted under Section 80-1B to grant five years' tax holiday to encourage hospitals to be set up anywhere in India, except certain specified urban areas and to be particularly set up in Tier-2 and Tier-3 towns to serve the rural people. It was stated that the window will be open from 01.04.2008 to 31.03.2013 and during that period, the hospital must commence operation.

(2.) The petitioner claims that he had set up a hospital in Nilgiri Therku Thottam Village, Thanjavur Taluk and District, to help the rural people. He purchased land for a total consideration of Rs.1,20,79,000/-, under registered sale deeds. He also obtained a loan for a sum of Rs. 7,00,00,000/- at the rate of 11% interest for construction of the hospital from HDFC Limited, Madurai. Overdraft amount of Rs.20,00,000/- at the rate of 9.7% interest was also sanctioned for purchasing the infrastructure required for the said hospital. He also obtained a further loan of Rs.7,21,64,000/- at the rate of 12.5% interest on 11.09.2013 from HDFC Bank, Chennai, for purchase of Elekta Linac, infrastructure fund and OD facility. The hospital was constructed in accordance with the approved building plan. It commenced to function from 05.01.2013 in the name of "Meenakshi Hospital".

(3.) The petitioner claimed that he filed his original written of income admitting an income of Rs.1,30,98,160/- on 30.09.2014. A search under Section 132 of the Income Tax Act was conducted at the petitioner's residence on 26.11.2014. The return of income filed by the petitioner was processed under Section 143 (1) of the Income Tax Act , 1961 and on 26.10.2015, the case was centralized to the 3rd respondent herein. Notice under Section 153A was issued to the petitioner by the 3rd respondent. A further notice under Section 143 (2) was issued on 29.07.2016 and notices under Section 142 (1) were issued on 23.08.2016 and 29.09.2016.