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2014 (6) TMI 608 - AT - Income TaxPayments made to professional Doctors – Professional payments or not - Employer-employee relationship - TDS deducted u/s 194-J of the Act – Assessee in default u/s 201(1) and 201(1A) of the Act - Held that:- following Deputy Commissioner of Income-tax Versus Yashoda Super Speciality Hospital [2010 (6) TMI 642 - ITAT HYDERABAD] – the exclusion cannot be considered to be an agreement to treat the doctors as employee - There is no prohibition in law to engage the services of a professional exclusively for a particular hospital - Merely because the doctors were engaged for two years, it does not mean that they are employees of the assessed hospital - CIT (A) the other factor such as PF, Job assignments, working hours, direction and supervision are all the relevant factors to consider the existence of employer and employee relationship - the agreement between the assessed and doctors are one for providing professional services, and there is no element of employer and employee relationship existing - tax has to be deducted u/s.194J as fee for professional services and not as salary. The terms of appointment clearly indicate appointment of professionals for providing consulting services and not appointment of employee - The Doctors are not precluded from pursuing the professional pursuits elsewhere as long as there is no conflict of interest - once the Doctors achieve some seniority and standing, their remuneration is a percentage of fees collected from patients consulting him - Explanation (a) to sec 194J defines professional services to mean services rendered by a person in the course of carrying on legal, medical - Normally the services rendered by a Doctor should be considered as a professional service unless the contracts of service categorically states and the conditions are clearly and indubitably that of employment - the services rendered by the Doctors are more appropriately classifiable as professional services and therefore Assessee had correctly deducted tax at source from payment to Doctors u/s 196J. The doctors or professional consultants working under contract for rendering professional services and the payments made by the assessee company to the professional doctors does not constitute salary and hence, the assessee would not be responsible for deducting tax at source on the said payments treating them as (salaries) in terms of section 192(1) of the Act - The consultant Doctors do not take directions from the assessee on how a patient is to be treated and clearly there is no employer employee relationship between the assessee and the professionals – Decided against Revenue.
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