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TMI Blog2004 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... onorary Teachers. * If answer to above is yes, then under which section. 2. The Goethe Institute Germany is a society registered in Munich Germany. In 1968 the applicant, Max Mueller Bhawan, was set up as a Cultural Institute in India as a branch of the said society which is under the control of the Govt.of Federal Republic of Germany. One of its functions is to teach German language in which preliminary and advance courses are being conducted by full time teachers. From April 1, 2003 the applicant has proposed to engage honorary part time teachers on contract basis to take classes in German Language during a semester and for that purpose a panel of teachers is maintained. Teachers are drawn from the panel for each semester on payment of honorarium at varying rates, a few of them are within and the other exceed the existing taxable limit. The applicant claims that the part time teachers engaged for each semester are not its employees and as no salary is paid to them, no tax is required to be deducted under section 192 of the Act; Tax cannot be deducted under section 194J of the Act, submits the applicant, because teaching is not included in the definition of 'professional ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to order/require what is to be done but also how it should be done. The distinguishing features between a servant and an independent contractor is of great significance. In Shivnandan Sharma v.Punjab National Bank [Air 1955 S.C.404], the Supreme Court highlighted the distinction between servant and independent contractor thus, "The distinction between a servant and an independent contractor has been the subject-matter of a large volume of case-law from which the text-book writers on torts have attempted to lay down some general tests. For example, in Pollock's Law on Torts, the distinction has thus been brought out: "A master is one who not only prescribes to the workman the end of his work, but directs or at any moment may direct the means also, or, as it has been put, ' retains the power of controlling the work', a servant is a person subject to the command of his master as to the manner in which he shall do his work…… An independent contractor is one who undertakes to produce a given result but so that in the actual execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and employee must necessarily vary from business to business and is by its very nature incapable of precise definition. The correct method of approach, therefore, would be to consider whether having regard to the nature of the work there was due control and supervision by the employer. A person can be a workman even though he is paid not per day but by the job. The fact that Rules regarding hours of work, etc., applicable to other workmen may not be conveniently applied to them and the nature as well as the manner and method of their work would be such as cannot be regulated by any direction given by the Industrial Tribunal, is no deterrent against holding the persons to be workmen within the meaning of the definition if they fulfil its requirement". * Mr. Abidi, Addl. Commissioner, relied upon the judgment of the Supreme Court in the case of Ram Prasad v. Commissioner of Income-tax [86 ITR 122]. In that case, the question that arose for consideration of the Supreme Court was as to whether the Managing Director of the company was its servant or agent. The moot point was whether certain sum was taxable as salary in his hands under section 7 of the Income-tax Act, 1922 or wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the work to be done and the manner in which it should be done. However the agreement gives liberty to the teacher to work for any places, institute or company during the tenure of the agreement and it clarifies that the teacher shall not have the status of an employee nor shall be entitled to avail benefits of the regular employees of the applicant, but in our considered views these terms will not mitilate against the relationship of Master and servant between the applicant and the teacher, once the aforementioned test is satisfied. 11. Chapter 17 of the Act embodies provisions for collection and recovery of tax by various methods like deduction at source, collection at source, advance payment of tax, collection and recovery. Section 192 which is contained in the said chapter enjoins deduction of tax at source (referred to in this ruling as TDS) in case of income of the payee being chargeable under the head "salaries". Sub-section (1) of section 192 enjoins that any person responsible for paying any income chargeable under the head "salaries" shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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