ACIT(TDS), CIRCLE - PANAJI, PANAJI vs. M/S VICTOR HOSPITALS AND MEDICAL SERVICES LIMITED, MARGAO

This appeal by the Revenue against the order dated 18-09-2019 passed by the Commissioner of Income Tax (Appeals)-1, Panaji [‘CIT(A)’] for assessment year 2012-13.

The Revenue raised nine grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) justified in holding that the TDS u/s. 194J of the Act is correct as against the view of AO u/s. 192B of the Act.

The ld. DR placed reliance on the order of AO. The ld. AR drew our attention to the case laws filed in the form of paper book.

Heard both the parties and perused the material available on record. The Hon’ble High Court of Bombay in the case of Grant Medical Foundation reported in 375 ITR 49 (Bombay) which is at page No. 1 of the paper book, wherein, answered the substantial question of law “whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in holding that there existed no relationship of employer and employee between the assessee and consultant doctors employed in the hospital?" against the Revenue, wherein, the Hon’ble High Court was pleased to observe that merely because that if any doctor attends for certain period of time or required number of hours at a particular hospital means they will not be entitled to visit any other hospital or attend patients at it necessarily. In the present case also, the assessee engaged the professional services of several doctors as consultants and remuneration is paid to them on which the TDS u/s. 194J of the Act deducted treating the same as professional fees. Further, the Hon’ble High Court of Bombay in the case of Asian Heart Institute and Research Centre reported in 262 Taxman 471 (Bombay) and in the case of National Health and Education Society reported in 412 ITR 404 (Bombay) at pages 17 and 24, respectively of the paper book by following the ratio laid down in the case of Grant Medical Foundation (supra) held when a doctor is not entitled to benefits like leave encashment, gratuity, provident fund, superannuation benefits etc. indicates that the relationship was not one of the employer-employee. On an examination of the impugned order, the CIT(A) discussed the issue in detail in para 14 of the impugned order regarding the conditions for engaging specialist doctors and other conditions and held the assessee rightly deducted TDS u/s. 194J of the Act. In view of the ratio laid down by the Hon’ble High Court of Bombay in the case of Grant Medical Foundation (supra), we note that the AO failed to prove existence of employer-employee relationship between the assessee and the consultant doctors. Therefore, we find no infirmity in the order of CIT(A) and it is justified. Thus, the grounds raised by the Revenue are dismissed.

In the result, the appeal of Revenue is dismissed.