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TMI Blog2009 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be incorrect beyond doubt. 3. The learned CIT(A) has erred in law as well as on facts in holding the assessee as not in default ignoring that fee is being collected by the assessee and paid by it to the doctors after adjustment of certain amounts as borne out from statement of Dr. Rajesh Ahlawat, specifically pointed by the AO in his order. 4. In the facts and circumstances of the case as well as in law, the learned CIT(A) has erred in deleting the addition made by the AO by treating the assessee as an assessee-in-default under s. 201(1) for failure to deduct tax on payments covered under s. 194J of the Act." 2. The assessee company is in the business of running a hospital in the name of 'ApolloHospital' at Sarita Vihar,Delhi. The AO observed that in addition to the salaried doctors, the hospital utilizes the services of number of medical professionals on contract basis; that in respect of medical consultants, TDS was not deducted from the payments being made to them. The assessee submitted before the AO, inter alia, that all fees received from the out-patients were collected by the assigned secretarial staff on behalf of the respective consultants; that no part of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the respective doctors without deduction of tax; that the hospital was providing infrastructure, para-medical staff, supporting staff and machinery and equipment in the OPD chambers, which was required to examine the patients; that as per the IT return of one of the doctors, no separate OPD collections were being shown by the doctors; that the receipts were being shown, which were paid by cheque by the hospital after deducting the TDS; that a number of doctors had been showing additional receipts in respect of their private clinics, which did not indicate the receipts from the OPD conducted in the hospital; and that tax was being avoided by the respective doctors in respect of cash collections received from the OPD. From these observations, the AO observed that it stood established that the hospital had been providing services to the patients and the amount collected from the patients was being given to the concerned doctors without deduction of tax; and that as such, the assessee hospital was liable to be treated as the assessee in default. 4. By virtue of the impugned order, the learned CIT(A) allowed the appeal filed by the assessee against the aforesaid assessment order. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and service recipients between the consultants and the hospital, when the consultants attended to outdoor patients; that the doctors merely used the consulting chambers along with the secretarial pool staff, for which they paid fixed rent as per the usage allocated to them, in accordance with the aforesaid circular; that the fee received from the outdoor patients was collected by the assigned secretarial staff on behalf of the doctors/consultants, which was paid over to the respective doctors/consultants at the end of each day; that no part thereof was collected on behalf of or any odd for the benefit of the assessee; that the secretarial pool staff only helped the doctors in arranging appointment with the patients, collecting the consultation fee, issued receipts to the patients and handed over the fee collected to the respective doctors on the same day; that the consultants were permitted to have their own secretarial staff with the prior permission of the director (medical services) and in that case, the services provided by the pool secretarial staff were taken care of by the concerned consultants' own secretarial staff; that once the out patient was admitted as an in patient, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipients between the consultants and the assessee; that rather such a relationship existed between the consultants and the patients; that as such, the assessee could not be held as an assessee in default for non-deduction of tax at source under s. 194J of the Act regarding the amount collected from out patients by the assessee on behalf of doctors/consultants; that the learned CIT(A) while passing the order under appeal, duly took all the above facts into consideration and that therefore, there is no error whatsoever in the order under appeal. The learned counsel for the assessee, on the basis of these submissions, has contended that the appeal filed by the Department be dismissed. 8. We have heard the parties and have perused the material on record. While passing the order under appeal, the learned CIT(A) has observed, inter alia, that the assessee was engaged in providing and facilitating health care services; that the assessee had engaged the services of resident doctors and full-time/part-time senior consultant/consultant for attending the in-patients; that they were being paid remuneration for the services provided to the assessee after deducting tax at source as per the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under the Act. 11. In the present case, the provisions of s. 201(1) of the Act are clearly not attracted. It stands proved that the interaction between the patients and the consultants/doctors engaged by the assessee, is one to one relationship and the assessee merely acts as a conduit/go between. It has been established on record and the Department has not been able to unhinge this, that the fee collected by the assessee was on behalf of doctors from the patients. It was paid to the doctors at the end of each day. The statements of doctors, recorded by the AO, reiterate this position. These doctors did not state otherwise. 12. Sec. 194J of the Act is also not attracted. Thereunder, a person is liable to deduct tax at source for any payment in excess of Rs. 20,000 to a resident for availing professional or technical services. There was no relationship of the service provider and the service recipient between the consultants and the assessee. Rather, such relationship existed between the doctors/consultants and the patients. The collection of fee was paid and passed it on to the doctors by the pooled secretarial staff of the assessee hospital. Nothing inured for the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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