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TMI Blog2016 (3) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.296/Chd/2015 : 3. Briefly, the facts of the case are that the assessee is running a hospital under the name and style of Fortis Healthcare Ltd. at Mohali. The TDS inspection under section 133A of the Income Tax Act, 1961 (in short 'the Act') was carried out at the business premises of the assessee as on 20.4.2012. The assessee had deducted tax at source in respect of payments to doctors appointed on retainership basis under section 194J of the Act by treating the payments as professional charges. The Assessing Officer was of the view that the payments made to these doctors were required to be treated as salary and taxes were required to be deducted under section 192 of the Act. The assessee submitted before the Assessing Officer that there does not exist employer and employees relationship between the assessee and these doctors, therefore, TDS has to be deducted under section 194J of the Act. Reliance was placed on the order of the Hyderabad Bench of I.T.A.T. in the case of DCIT Vs. Yashoda Super Speciality Hospital (2010) 33 TTJ 17 (Hyd. ) , in the case of ITO Vs. Apollo Hospitals International Ltd. , ITA No.3363/Ahd/2008 and that of I .T.A.T. , Chandigarh Bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee:- (a) DCIT vs. Yashoda Super Speciality Hospital (2010) 33 TTJ 17 (HYD), ITAT Hyderabad Bench, 'B' (b) ITO vs. Apollo Hospitals International Ltd., ITA No.3363/Ahd/2008 A.Y.2007-08. (c) DCIT vs. Ivy Health Life Sciences Pvt. Ltd., in ITA No.731 & 732/Chd/2012. The facts of the case laws cited by the assessee are different from the present case, as the doctors engaged in the above Hospitals were part-time consultants whereas the doctors in the present ease were full time consultants engaged by the Hospital and as per the agreements signed between the Hospital and the doctors were exclusively meant to work for the assessee hospital and were not permitted to do their own private practice or with any other organization. (2) The Ld. CIT(A), Chandigarh has also not appreciated the facts established by the AO that the facts of the cases (case laws) quoted by the assessee were totally different from the case in hand, and from the (terms and conditions of the written agreements between the Hospital and the (doctors it stands proved that the Hospital Authorities had full control over the doctors as their working hours & working days were fixed by the employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment made to these retainers should be treated as salary and consequently, tax has to be deducted under section 192 of the Income Tax Act, 1961 (in short 'the Act') instead of section 194J of the Act, which the assessee has deducted. On perusal of the order of the Assessing Officer made under section 201 of the Act, we find that the Assessing Officer has raised at page 5, para 6 of his order seven objections based on which he has held that these doctors are being made payment of salary. The first objection raised by the Assessing Officer is with regard to the clause of agreement that the retainer doctors shall be associated exclusively with the assessee as full time consultant and shall not associate himself with any other hospital. The point No.(v) is also related to this point No.(i) only, whereby it has been objected by the Assessing Officer that the retainers are barred from engagement with any other organization engaged in a similar business. On perusal of the agreement with these retainer doctors filed before us in the Paper Book, we see that there is a clause at point No.8 in this agreement which reads as under : "8. You shall not act in a similar, or any capac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors is a long term association, it cannot be said that the relationship between the assessee and the doctors is that of employer and employees. 13. The point No.(vi) raised by the Assessing Officer is with regard to the condition that the retainers may develop or create either individually or jointly with company any original concepts, ideas, plans, designs, presentations, data base, floppies, products etc. but as per the clauses of the agreement these creations shall be treated as sole and exclusive property of the company and the retainers shall not claim to have any legal title or interest in any such creations at any point of time. Even on perusal of this clause we do not see how the Assessing Officer can infer that the payments made by the assessee to these doctors are in the nature of salary. Once the person is hired for some specific purpose in order to provide quality services to the patients and to protect the interest of the assessee hospital, this kind of condition imposed is very common. 14. We see that some of the objections taken by the Assessing Officer are on basic and general conditions laid down in the retainership agreement which do not in any way infer that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal in the case of Ivy Health Life Sciences (P.) Ltd. (supra). The Assessing Officer himself had stated in his order that this case was under the same Assessing Officer as that of the current assessee. However, since the decision of the I.T.A.T., Chandigarh Bench is not acceptable to the Revenue and an appeal has been filed before the Hon'ble Punjab & Haryana High Court, he did not apply the facts of the said case to the present case. We also observe that the said case has not been discussed on facts by the Assessing Officer in his order. The learned CIT (Appeals) is correct in holding that the Assessing Officer ought to have considered the issue on merits rather than summarily rejecting the reliance placed by the assessee. During the course of hearing before us, it was stated that this order of the I.T.A.T., Chandigarh Bench was later on affirmed by the Hon'ble Punjab & Haryana High Court in Ivy Health Life Sciences (P.) Ltd.'s case (supra). We have perused the order of the I.T.A.T., Chandigarh Bench as well as that of the Hon'ble Punjab & Haryana High Court in the case of Ivy Health Life Sciences (P.) Ltd.'s case (supra) and we see that the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service' implies a contract, whereby one party undertakes to render the service, for example professional or technical services, to or for another in the performance of which he is not subject to detailed directions and control but exercises professional or technical skill and uses his own knowledge and discretion. A 'contract of service' implies relationship of master and servant and involves an obligation to obey orders in the work to be performed and also as to its mode and manner of performance. As we have also stated that from the perusal of the agreements with the doctors, we do not see any relationship that of master and servant between the assessee and the doctors on retainership basis. It is also seen from these agreements that the doctors who are on the pay roll of the assessee are debarred from taking up any other work for remuneration part time or otherwise or work in advisory capacity or on interest directly or indirectly in any other trade or business during the employment with the assessee without permission of the assessee, while the doctors on retainership basis are only debarred from not getting in similar or any capacity for any other company engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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