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2021 (7) TMI 458 - AT - Income TaxTDS u/s 192 or 194J - payment made by assessee hospital to certain consultant doctors - Professional payments OR payment to salaried employees - HELD THAT - As noted that the terms of arrangement with consultant Doctors was different from employee-doctors. The consultant doctors were paid based on the services rendered by them and on the basis of doctors fees collected by the hospital from the patients. The same is evident from the fact that the payment made to these doctors vary significantly in each month. This was so because fees payable to them was linked to services rendered and patients attended to by them during the relevant period - the consultant doctors were not entitled to any fix remuneration. There was no specific timing and attendance record maintained by hospital with respect to such doctors and this category of doctors was not be eligible for any leave, provident fund, gratuity, bonus etc. and were not subject to admission or retirement from services. They were not entitled to several benefits as allowed to regular employees such as medical reimbursement. Insurance, leave encashment etc. All these facts and features would bolster assessee s claim that there was no employer-employee relationship between the assessee and consultant doctors. Therefore, the tax was rightfully deducted u/s 194J.
Issues:
1. Whether the Hospital Based Consultants should be treated as employees for tax purposes under Section 192 of the Income Tax Act, 1961? 2. Whether the payment made to employees of a hospital should be treated as reimbursement or payment towards professional fees requiring TDS deduction under Section 194J of the Act? 3. Whether TDS on payments made to employees should be deducted under Section 194J or Section 192 of the Act? Analysis: 1. The appeal by the revenue contested the order of the Ld. Commissioner of Income-Tax (Appeals) regarding the treatment of Hospital Based Consultants (HBCs) as employees for tax purposes under Section 192 of the Income Tax Act, 1961. The revenue argued that the payment made by the hospital to consultant doctors should require tax deduction at source under Section 194J for professional payments, not under Section 192 for salaried employees. 2. The Tribunal noted that the Ld. CIT(A) based his decision on the order of the Tribunal in the assessee's own case for AY 2008-09, where it was held that there was no employer-employee relationship between the hospital and the consultant doctors. The Tribunal found no factual distinction to warrant a different decision and upheld the Ld. CIT(A)'s findings. 3. The material facts revealed that the hospital engaged consultant doctors on a retainer-fee basis for providing medical services, and the terms of their arrangement did not indicate an employer-employee relationship. The hospital charged patients for various services, including doctors' fees, which were paid to consultant doctors after TDS deduction under Section 194J. The revenue argued that tax should be deducted under Section 192 for salary payments due to the control and supervision exercised over the doctors. 4. During the appellate proceedings, the assessee reiterated that consultant doctors were not employees and were paid based on services rendered, not fixed remuneration. The Tribunal considered previous decisions and upheld that there was no employer-employee relationship, supporting the tax deduction under Section 194J. The Ld. CIT(A) concurred with this view, leading to the dismissal of the revenue's appeal. 5. The Tribunal concluded that the terms of arrangement with consultant doctors differed from employee doctors, and the absence of specific timing, attendance records, and employee benefits indicated no employer-employee relationship. The Tribunal upheld the tax deduction under Section 194J, as there was no reason to interfere with the Ld. CIT(A)'s decision based on previous rulings and the factual matrix presented. 6. The appeal was dismissed, affirming the decision that the hospital was not liable to deduct tax under Section 192 and was not to be treated as an assessee-in-default. Order pronounced on 12th July, 2021.
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