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2013 (6) TMI 381 - AT - Income TaxNon deduction of tax at source on payments to the hospitals - TPA - appellant prays that they have not availed any professional services as contemplated u/s. 194J - default u/s 201(1) - interest levied u/s. 201(1A) - Held that - In view of decision of Dedicated Health Care Services TPA vs. ACIT 2010 (5) TMI 98 - BOMBAY HIGH COURT observe that CIT(A) has rightly held that assessee was required to deduct TDS u/s.194J in respect of payments made by the assessee to the hospitals/nursing homes. Therefore issue is decided against the assessee. A.R. submitted that the only balance amount left out of ₹ 9,92,48,570 is ₹ 7,34,60,140 on which assessee is liable to pay TDS & also conceded that assessee is also liable to pay interest u/s.201(1A) on the TDS payable on ₹ 7,34,60,140 and is also liable to pay interest on the TDS payable of ₹ 89,61,485 till the date of payment of tax thereon by the deductee. D.R. has no objection to that extent subject to the condition that assessee should furnish the requisite certificates as per CBDT Circular No.8 of 2009 dated 24.11.2009 - restore the issue to the file of AO with a direction to calculate the TDS payable by the assessee and the liability of interest u/s.201(1A) subject to the observations made hereinabove after giving due opportunity of hearing and also considering such evidences as may be produced by the assessee before him. In favour of assessee.
Issues Involved:
1. Applicability of Section 194J on payments to hospitals/nursing homes. 2. Liability of deductor when deductees have paid tax. 3. Calculation of interest under Section 201(1A) for non-deduction of tax. Issue 1 - Applicability of Section 194J: The appellant contested the applicability of Section 194J on payments made to hospitals, arguing that they are not liable to deduct tax at source. However, the Tribunal upheld that the appellant was required to deduct TDS under Section 194J based on a previous decision of the Hon'ble Bombay High Court. The services provided by the appellant fell within the purview of technical services, leading to a rejection of the appellant's appeal on this ground. Issue 2 - Liability of Deductor: The appellant claimed that since the hospitals had included the payments in their income tax returns and paid taxes, the appellant should not be liable to deduct tax at source. The Tribunal agreed that if certificates from the payees' auditors were produced, certifying that the tax had been paid, the appellant should not be held responsible for TDS deduction. The matter was remanded to the Assessing Officer to verify these certificates and adjust the TDS liability accordingly. Issue 3 - Calculation of Interest under Section 201(1A): Regarding the calculation of interest under Section 201(1A) for non-deduction of tax, the Tribunal directed the Assessing Officer to recalculate the TDS payable by the appellant and the interest liability under Section 201(1A). The appellant was instructed to provide the necessary certificates as per CBDT Circular No. 8 of 2009. The Tribunal allowed the appeal on this issue, granting relief to the appellant. In conclusion, the Tribunal partially allowed the appellant's appeal, addressing each issue comprehensively and providing detailed reasoning for the decisions made. The judgment clarified the applicability of Section 194J, the liability of the deductor in cases where the deductees have paid taxes, and the correct calculation of interest under Section 201(1A) for non-deduction of tax.
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