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TMI Blog2016 (10) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed remuneration despite fixed hours of works which may substantially regulating their application for leave and other discipline. With these observations, we hold that the doctors are discharging only professional services and the assessee is not liable to deduct tax u/s 192 of the Act. Thus, the appeal of assessee is allowed. - ITA No.2681/Mum/2015 - - - Dated:- 26-8-2016 - SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Vijay Mehta (AR) For The Revenue : B.S. Bist (DR) ORDER PER PAWAN SINGH, JM: 1. The present appeal is filed by the assessee against the order of CIT (A)-21, Mumbai dated 126.02.2015 for Assessment Year(AY) 2008-2009 raising the following Grounds of appeal: 1. The order passed by the CIT(A) is illegal, bad in law, ultra vires and contrary to the provisions of law and facts of the case and without appreciating the facts of the case in their proper perspective. 2. a) The learned CIT (A) erred in confirming the action of the Assessing Officer (AO) that the appellant has failed to comply with the provisions of section 192 by deducting TDS U/S 194J on payment made to full ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined u/s 201(1) can be raised against the tax deductor/assessee. DR for the Revenue supported the orders of authorities below. 4. We have considered the rival contentions of the parties and perused the material available on record. The AO while passing the order, observed that the assessee s Hospital engaged in visiting doctors, full time consulting doctors and residential medical officers (RMOs) and tax is being deducted at source u/s 192 of the Incometax Act to RMOs and u/s 194J on the payments to visiting doctors but the tax is deducted u/s 194J in respect of full time consultation. The AO examined the condition of the engagement of the doctors and concluded that the condition of daily attendance into devote his expertise (only to the Hospital) can only be dictated with their employee-employer relationship and whole of the doctors are employee of the assessee-company and TDS has to be deducted u/s 192 of the Act. Ld. CIT(A) during the appellate proceeding, observed that the AO rightly hold that payments made to 23 doctors totalling to ₹ 38,79,074/- as remuneration/salary and not fees for profession, service or technical services. Ld. CIT(A) further observed that doct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en as a workman within the meaning of Section 2(s) of the ID Act. We are of the view that the principle laid down by this Court in A. Sundarambal's case (supra) and in Muir Mills's case (supra) squarely applies to such professionals. That being the factual and legal position, we find no reasons to interfere with the judgment of the High Court. The SLP lacks merit and is dismissed accordingly. This decision is relevant only for the purpose of noting as to how doctors' role is perceived and it is considered as a noble profession mainly dedicated to serve the society which demands professionalism and accountability. A distinction between occupation and profession and which is of paramount importance has been noted. 32) In the case of Indian Medical Association Vs. V.P. Shantha and Ors reported in AIR 1996 Supreme Court, 550 what was adjudicated by the Court is why doctors and medical professionals were brought within the purview of the Consumer Protection Act, 1986 and in relation to the services rendered by them. The argument was that the Consumer Protection Act defines the term service in Section 2 (1) (o) of the Consumer Protection Act, 1986. A doctor pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 540; Simmons v. Heath Laundry Co. (1910) 1 K.B.543; and Dharangadhara Chemical Works (supra) at p. 159]. We entertain no doubt that Parliamentary draftsman was aware of this well accepted distinction between contract of service and contract for services and has deliberately chosen the expression `contract of service' instead of the expression `contract for services', in the exclusionary part of the definition of ` service' in Section 2(1)(o). The reason being that an employer cannot be regarded as a consumer in respect of the services rendered by his employee in pursuance of a contract of employment. By affixing the adjective `personal' to the word service the nature of the contracts which are excluded is not altered. The said adjective only emphasizes that what is sought to be excluded is personal service only. The expression contract of personal service in the exclusionary part of Section 2(1)(o) must, therefore, be construed as excluding the services rendered by an employee to his employer under the contract of personal service from the ambit of the expression service . 42.It is no doubt true that the relationship between a medical practitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospital, attend them as out patients and Indoor patients does not mean that a employer-employee relationship can be culled out or inferred. We do not see how Mr Gupta can fault such conclusions by relying upon decisions which have been rendered in cases of doctors having a fixed pay and tenure. In that case, before us, there is no dispute. Even the assessee accepts the position that they are the employees of the assessee trust. 38) However, in cases of other doctors the contract would have to be read as a whole. It would have to be read in the backdrop of the relationship and which was of engagement for certain purpose and time. The skill of the doctors and their expertise were the foundation on which an invitation was extended to them to become part of the assessee which is a public charitable trust and rendering medical service. If well known doctors and in specified fields are invited to join such hospitals for a fee or honorarium and there are certain terms drawn so as to understand the relationship, then, in every case such terms and the attendant circumstances would have to be seen and in their entirety before arriving at a conclusion that there exists a employer-employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time, money and infrastructure is not wasted. Hence, fixed timings and required number of hours and such stipulations are incorporated in contracts so that they are of binding nature.The Doctor or Expert Medical Practitioner is then obliged to denote his time and energy to the clinic whole heartedly. If handsome remuneration, fee is prescribed in return of ready-made facilities even for professionals, then, such insistence is not necessarily to treat highly qualified professionals as servants. It is a relationship of mutual trust and confidence for the larger interest of the patient being served efficiently. From this contract or any clause therein no such conclusion could have been arrived at. We do not see how there was any express bar from working at any other hospital and if the contracts would have been properly and carefully scrutinized. Merely because their income from the hospital is substantial does not mean that ten out of the fourteen criteria evolved by the Commissioner have been satisfied. The Assessing Officer and the Commissioner, therefore, were in complete error.We have also perused these contracts and copies of which are annexed to the paper book being part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greed with the Commissioner. We do not find even in the case of Dr Sumit Basu the Commissioner or the Tribunal committed any error. Merely because of his stature he was ensured and guaranteed a fixed monthly payment. That would not make him an employee of the hospital. This cannot be seen as a stand alone term. There are other terms and conditions based on which the entire relationship of a consultant or professional and visiting the assessee's hospital had been determined.Once again, no general rule can be laid down. Nowadays, Private Medical Care has become imperative. Public Hospitals cannot cater to the increasing population. Hence, Private Hospitals are established and continue to be formed and set up day by day. The quality of care, service, attention, on account of the financial capacity, therein has forced people of ordinary means also to visit them. Since specialists are in demand because of the life style diseases that consultants and doctors prefer these hospitals. Sometimes they hop from one medical centre or clinic to another throughout the day. Retaining them for fixed days and specified hours requires offering them friendly terms and conditions. In such circumsta ..... 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