DCIT (TDS) - 1(1), MUMBAI vs. ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD., MUMBAI

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ITA 2211/MUM/2016Status: DisposedITAT Mumbai31 May 2017AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) which had followed previous Tribunal orders in favor of the assessee. The CIT(A) had held that Section 194C was applicable for pest control and AMC, and Section 192 was applicable for consultant doctors.

What were the facts?

The Assessing Officer (AO) held the assessee in default for not deducting TDS correctly on payments made to consultant doctors and for pest control/AMC expenses. The AO applied Section 192 and 194J, whereas the assessee had applied Section 194J and 194C respectively.

What were the issues?

The primary issue was the correct applicability of TDS provisions (Sections 194C, 194J, and 192) on payments made for consultant doctors and maintenance services.

Which sections of the Income-tax Act were involved?

Section 194C,Section 194J,Section 192,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN

For Appellant: Shri Saurabh K. Rai, DR
For Respondent: Shri D.D. Anjaria, AR
Hearing: 25/05/2017Pronounced: 31/05/2017

ORDER

PER N.K. PRADHAN, AM

1.

This is an appeal filed by the revenue. The relevant assessment year is 2012-13. The appeal is directed against the order Commissioner (Appeals) – 59, Mumbai and arises out of assessment made u/s 201(1)&201(1A) of the Income Tax Act, 1961 (the ‘Act’).

2.

The grounds of appeal raised by the revenue read as under:

1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred by holding that provisions of section 194C are applicable and not the provisions of section 194J as held by the A.O. without appreciating the fact that the maintenance of specialized machines in hospitals call for skilled professional/ technical engineers and cannot be held as single contractual charge.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred by holding that the provisions of section 194C are applicable and not the provisions of section 194J of the IT Act as held by the A.O. without appreciating that the very nature of pest control in hospital is akin to industrial pest control and varies from regular day-to-day pest control.

3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred by holding that the provisions of section 194J are applicable and not the provisions of section 192 of the IT Act as held by the A.O. without appreciating that there exists employer-employee relationship between the consultant doctors and the company.

4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the demand of Rs.7,40,08,412/- without properly appreciating the factual and legal matrix of the case as clearly brought out by the A.O. in order u/s 201(1)/201(1A) of the Income Tax Act, 1961.

3.

Briefly stated, the facts of the case are that the Assessing Officer (A.O.) found that (i) the assessee had been deducting TDS @ 10% u/s 194J on the payment made to consultant doctors instead of 30% u/s 192, (ii) the assessee had been making TDS @ 2% u/s 194C on the payments made for pest control expenses and annual maintenance contract instead of 10% u/s 194J of the Act. Therefore, the A.O. held the following:

U/s. 201(1) U/s. 201(1A) for 36 Total (Rs.) months (Rs.) Payment towards 16,66,034 5,99,772 22,65,806 Annual Maintenance Contract (AMC) & Pest Control Expenses Payment made to Full 5,27,59,269 1,89,83,337 7,17,42,606 Time Consultants Total 5,44,25,303 1,95,83,109 7,40,08,412

In view of the above, the A.O. held the assessee to be in default for non-deduction of TDS and worked out the total tax liability of the assessee at Rs.7,40,08,412/-.

4.

Aggrieved by the order of the A.O., the assessee filed an appeal before the Ld. CIT(A). We find that he Ld. CIT(A) has followed the order of the Tribunal in the case of the assessee for the A.Y. 2008-09 (ITA No. 7051/Mum/2012), A.Y. 2009-10 (ITA No. 7052/Mum/2012), A.Y. 2010- 11 (ITA No. 7053/Mum/2012) and A.Y. 2011-12 (ITA No. 7054/Mum/2012) and allowed the appeal filed by the assessee.

5.

The Ld. D.R. relies on the order passed by the A.O. On the other hand the Ld. Counsel of the assessee supports the order passed by the Ld. CIT(A).

6.

We have heard the rival submissions and perused the relevant material on record. We find that the issues in the instant appeal are squarely covered in favour of the assessee by the order of the Tribunal relied on by the Ld. CIT(A) which have been mentioned at para 4 here-in- above. Facts being similar, we follow the order of the Co-ordinate Bench for the A.Y. 2008-09, 2009-10, 2010-11 and 2011-12 and uphold the order of the Ld. CIT(A).

7.

In the result, the appeal is dismissed.

Order pronounced in the open Court on 31/05/2017.

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