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TMI Blog2022 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, the doctors were not bound to prescribe the medicines as suggested by the assessee. As such there was no legal compulsion on the part of the doctors to prescribe a particular medicine suggested by the assessee, and therefore, the doctors could not be said to have acted as the agent of the assessee. In absence of the existence of the element of agency between the assessee and the doctors, the provisions contained in Section 194H of the Act could not be invoked. - Decided in favour of the assessee - I.T.A. Nos. 141 to 143/Ahd/2020 - - - Dated:- 23-5-2022 - SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR And SHRI WASEEM AHMED, ACCOUNTANT MEMEBR For the Appellant : James Kurian, CIT-DR and Purshottam Kumar, Sr. D.R. For the Respondents : Vartik Chokshi, A.R. ORDER Per Mahavir Prasad , JM All three appeals have been preferred by the assessee against the orders of the Commissioner of Income Tax (Appeals)-8, Ahmedabad ('CIT(A)' in short) vide Appeal Nos. CIT(A)-8/10103 10104/17-18 CIT(A)-8/10106/17-18, Ahmedabad; respectively; under s. 250 of the Income Tax Act, 1961 (the Act) concerning AYs. 2011-12 to 2013-14 wherein learned CIT(A) granted relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer took cognizance of the Notification issued by the Indian Medical Counsel dated 10.12.2009, which barred medical practitioners from taking gifts, travel facilities, hospitality, cash and monitory grants from any pharmaceutical industry and observed that the assessee had incurred the expenditure on the doctors for various conferences/workshops/camps etc., for which no TDS was deducted under Section 194H of the said Act. The Assessing officer was of the view that the relationship between the assessee company and the doctors was that of the principal and agent, and therefore, the payments made under different heads for regional conference, scientific conference, sale promotion expenditure, etc., would fall within the definition of commission . The Assessing officer, therefore, treated the assessee as an assessee in default under Section 201(1) for non-deduction of TDS under Section 194H of the said Act and raised the demand to the tune of Rs. 19.76 crore under Section 201(1) of the said Act. 4. Being aggrieved by the said order passed by the Assessing officer, the respondent assessee had preferred the appeals before the CIT (Appeals), who partly allowed the said app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business support of the assessee - company by rendering their services in the form of prescribing the medicines of the assessee company over a period of time and there was a contract between the assessee company and the doctors. According to Mr. Bhatt the Tribunal had also committed an error in holding that there was no element of agency, ignoring the documentary evidence adduced by the Department establishing the unwritten agreement of agency between the assessee and the doctors. He further submitted that there was no reason for the Tribunal to disallow the findings of facts recorded by the assessing officer and the CIT (Appeals), who had treated the expenditure incurred on the doctors as commission , and had accordingly made the respondent assessee liable to deduct the TDS under Section 194H of the said Act. 8. In order to appreciate the submissions of the learned Sr. Counsel Mr. Bhatt, it would be beneficial to reproduce the relevant provision contained in Section 194H of the Act:- 194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to which the services rendered by a person in the course of carrying on a legal, medical, engineering or architectural profession etc. On the conjoint reading of the provisions contained in Section 194H and the Explanation thereof, there remains no shadow of doubt that any payment received or receivable by a person for rendering medical services is excluded from the purview of Section 194H of the Act. 10. In the instant case, as per the case of the appellant, the E-mails and other correspondences ensued between the sales executive and the General Manager, seized during the survey operations, suggested that the doctors had acted as the agents of the respondent - assessee, by prescribing the medicines of the respondent assessee over a period of time, and therefore, the expenses incurred by the assessee company on the doctors towards taxi-fare, air-fare, etc., for attending the regional conferences or scientific conferences were required to be treated as the commission received or receivable as contemplated under Section 194H of the said Act. It is difficult to accept the said submission made by the learned Sr. Counsel Mr. Bhatt. As rightly held by the Tribunal, the Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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