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TMI Blog2020 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... octors are professionals and income earned by them is professional income but Section 194J is attracted, not only when professional fee is paid for services rendered by the recipient but income/fee received by the recipient is towards services rendered in the course of carrying on medical profession. Thus payments/fee for the services specified should be to a person who is a resident and Section 194J is not confined to payments to the person who is a professional. - For the reasons assigned by the Delhi High Court in Vipul Medcorp TPA (P) Ltd. [ 2011 (9) TMI 85 - DELHI HIGH COURT] as well as a decision TTK HEALTHCARE TPA PRIVATE LIMITED [ 2020 (10) TMI 755 - KARNATAKA HIGH COURT] the substantial questions of law 1 and 2 are answered in favour of the revenue and against the assessee. Computation of interest under Section 201(1A) - computed upto the due date of return of income to be filed by the deductee or upto the date of filing the return of income - Proviso to Section 201(1A) of the Act requiring computation of interest till date of filing of the return by the payee was inserted by Finance Act, 2012 with effect from 01.07.2012. Thus, for a period prior to 01.07.2012 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... briefly stated are that a survey under Section 133A of the Act was conducted in the premises of the assessee on 05.01.2009. Daring the course of survey it was found that the assessee has entered into agreement with various hospitals for extending medical facilities to policy holders of various companies with whom the assessee has entered into agreements to act as an agent. The assessee was making payments on behalf of the insurance company from the float funds available with the assessee, which were provided by the insurance company. The assessee did not deduct TDS on the payments made to the hospital. Therefore, the Assessing Officer vide order dated 06.03.2009 treated the assessee as assessee in default under Section 201(1) and computed interest under Section 201(1A) of the Act. 3. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 22.02.2011 inter alia held that the provisions of Section 194J of the Act apply to the assessee and therefore, the assessee was required to deduct TDS on the payments made to the hospitals. The Commissioner of Income Tax (Appeals) was directed to re-quantify the interest payable under Section 201(1A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that proviso to Section 201(1) mandates that the onus is on the payer to establish the payment of taxes by the payee. In support of aforesaid submission, reliance has been placed on decision of the Supreme Court in HINDUSTAN COCA COLA BEVERAGE (P.) LTD. VS. COMMISSIONER OF INCOME-TAX , (2007) 163 TAXMAN 355 (SC) and Circular dated 29.01.1997 issued by Central Board of Direct Taxes (CBDT). 5. On the other hand, learned counsel for the assessee submitted that the bills raised by the hospital include various other charges apart from professional fees viz., the charges like medicine, bed charges, biochemistry etc., which do not fall within the purview of professional fees and therefore, cannot be subjected to tax deduction under Section 194J of the Act. From plain reading of Section 194J of the Act, it is evident that what is subjected to tax deduction is fee for professional services alone. While referring to expression fees , in Black s Law Dictionary 6th Edition, it is submitted that fees means payment or consideration for the services rendered. It is also submitted that where a composite payment is made comprising payment of various nature which are clearly identifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son who renders service and is paid, must be a professional. These words signify that services rendered and paid for in the course of carrying on medical profession or other professions as stipulated, are covered and require deduction of TDS under Section 194J. As held in paragraph 10 above, the words in the course of carrying on are used with the intention to include incidental, ancillary, adjunct or allied services connected with or relatable to medical services. Thus, the sweep and scope of the Explanation is not restricted only to payments made to medical or other professionals, but services rendered in the course of carrying on the stipulated profession. A corporate hospital, therefore, does not carry on profession of medicine. It is not a professional and does not earn professional income but it can be paid fee for services in the course of carrying on professional services. It is not necessary that the person who renders service and is receiving the payment/fee should himself or herself carry on the medical profession or other professions. Explanation (a) does not stipulate that the services must be rendered by the person concerned himself and not with the help, assistance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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