C.I.T. HARYANA vs. DR. USHA VERMA

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ITR/139/1989HC Punjab & HaryanaPHHC01022512198911 October 2006Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages

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What did the High Court hold?

The High Court held that the questions referred to it had already been decided in the case of the same assessee for the assessment year 1980-81 in ITR No. 47 of 1985, decided on 21.11.2001. In that prior judgment, the questions were answered in favour of the revenue and against the assessee. Therefore, applying the same reasoning and precedent, the High Court answered the current reference in favour of the revenue and against the assessee. The specific reasoning from the prior judgment is not detailed here, but it established that the income was not taxable under 'Salary' and that an employee-employer relationship was not present in the context of the paying clinic's operations for tax purposes. The operative direction is to answer the referred questions in favour of the revenue.

What were the facts?

This case involves an Income Tax Reference (ITR) filed by the Commissioner of Income Tax, Haryana, Rohtak (the revenue) against Dr. Usha Verma (the assessee) for the assessment year 1978-79. The reference arises from an order of the Income Tax Appellate Tribunal, Delhi Bench 'B'. The core of the dispute concerns the classification of income earned by the assessee from a paying clinic run by the Government. The assessee is a Government employee who worked in this clinic. The revenue is challenging the Tribunal's affirmation of the Appellate Assistant Commissioner's order.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether, on the facts and circumstances, the Tribunal was correct in law in affirming the order of the Appellate Assistant Commissioner that income from the paying clinic should be taxed under the head 'profits or gains of profession' and not under the head 'Salary', as per the Income Tax Act, 1961. 2. Whether, on the facts and circumstances, the Tribunal was correct in law in holding that there was no employee-employer relationship, despite the assessee being a Government employee working in a Government-run paying clinic. The revenue argued in favour of taxing the income under 'Salary' and establishing an employee-employer relationship. The assessee's contentions, if any, are not recorded in the judgment. The judgment notes that these questions were previously decided by the High Court in ITR No. 47 of 1985 for the assessment year 1980-81.

AI-generated summary — verify with the full judgment below

ITR No.139 of 1989 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.139 of 1989 Date of decision:11.10.2006 The Commissioner of Income Tax, Haryana, Rohtak

....Petitioner versus Dr. Usha Verma, Rohtak ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Mr. Yogesh Putney, Advocate, for the revenue. JUDGMENT: Following questions of law have been referred for opinion of this Court by the Income Tax Appellate Tribunal, Delhi Bench “B” Delhi in RA No.1309/Del/1981 arising out of ITA No.2617/Del/80, in respect of assessment year 1978-79:- “i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in affirming the order of the Appellate Asstt. Commissioner holding that the income from the paying clinic should be taxed under the head 'profits or gains of profession' and not under the head 'Salary'? ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that there was no relationship of employee and employer, when the assessee, who is a Government employee, worked in the paying clinic run by the Government?” The questions have already been gone into in the case of the assessee for the assessment year 1980-81, in the judgment of this Court in ITR No.47 of 1985, decided on 21.11.2001 and the questions have been

ITR No.139 of 1989 2 answered in favour of the revenue and against the assessee. In view of the above, the questions referred are answered in favour of the revenue and against the assessee. (Adarsh Kumar Goel) Judge October 11, 2006 (Rajesh Bindal) 'gs' Judge

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