TMI Blog2015 (10) TMI 2051X X X X Extracts X X X X X X X X Extracts X X X X ..... has deleted the tax liability so imposed, however, he has confirmed the interest thereon. Thus, even during the appellate proceedings before the CIT(A) the AO has passed rectification order under section 154 and deleted all the liability created under Section 201(1) of the I.T.Act. - Decided in favour of assessee. - ITA No.387/Mum/2014 - - - Dated:- 16-9-2015 - SHRI R.C.SHARMA, AM and SHRI SANJAY GARG, JM, JJ. For The Assessee : Shri Dharmesh Shah For The Revenue : Shri Neil Philip ORDER PER R.C.SHARMA (A.M): These are the cross appeals filed by the assessee and revenue against the order of CIT(A), Mumbai, dated 19-11-2013 for the assessment year 2011-2012, in the matter of order passed u/s.201(1)/201(1A) of the Act. 2. Rival contentions have been heard and record perused. Facts in brief are that a survey u/s.133A was conducted in the case of assessee. During the course of survey it was found that assessee has not properly deducted tax at source in respect of payment made for hospitality services, doctor s fees, annual maintenance contrary payment. Accordingly, the AO computed the difference of tax u/s.201(1) and also charged interest u/s.201(1A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome- tax Officer (T DS), Jammu. V Is. Accounts Officer, Govt. Medical College, Jammu in IT Appeal Nos.112 and 113 (Asr.) of 2011 for Assessment years 2008-09 and 2009-10 dated May 7,2012. The Hon ble ITAT rli3s inter-alia held as under: 6.2 As regards the appeal on merits, as argued by both the parties and facts available on record, we are of the view that whole issue is with regard to the contracts entered into by the assessee, which is a Govt. Medical College at Jammu, has entered into agreements with various parties to maintain operation theatre and surgical equipments. RO system, CT Scan Machine, MRI machine, Lift, Sterilisation and Medical equipments along with Anti-termite treatment and also there were contracts for supply of Bread and Butter and supply of security and personnel. As regards supply of Bread and Butter and supply of security end personnel, we do not see any technical part or technical services as per facts available on record. As regards other services, whether the same is contract u/s 194C of the Act or technical service u/s 194J of the Act, has to be perused. The assessee has claimed a contract u/s 194C of the Act. Therefore, we have to peruse wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Theatre and Surgical operation with M/s, Thermtronics Krilosker Pvt. Ltd. As per conditions mentioned in the agreement in clauses (i) to (vi), the services of a technical qualified person are to be, made available to the assessee to maintain equipments and therefore, the said technical services as per CBDT Circular 715 dated 8.8.1995 cannot be services of routine and normal maintenance. The operation Theatre and Surgical are highly technical equipments for the operations of the persons. Therefore, they cannot be maintained in a routine or normal manner, but a technical person is required for maintenance of such equipments. Similar is the case with RO system, CT Scan Machine, MRl Machine, Lift and sterilisation medical equipments for the agreements made between MI5. Ridham Marketing Services, M/s. Wipro GE Medical System, M/s. Siemens Ltd M/s. OTIS Elevator and M/s. Expert Technical Service respectively. Therefore, we are of the view that these contracts cannot be the contracts in a routine or normal manner but for which technical service has .been rendered and provisions of section 194J read with section 9(1) of Explanation-2 are attracted, read with section 201(1) and 201(1A), w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to ₹ 23,11,157/-. However, the interest on the same is upheld. Therefore, the issue that whether TDS is to be deducted u/s.194J or 192 for payment to doctors, remains. 10. We have considered rival contentions and found that the AO has treated the doctors as under employment of the assessee, accordingly liable to deduction of tax u/s.192. From the record we found that payments were not made to doctors treating the said payments as salaries eligible for deduction of tax u/s. 192 of The Act Instead of 194J of the Act. The Doctors are individual Doctors and entitled to have independent practice. As such, they are not on the pay roll of the assessee and their services are availed on rotation basis fixed as per the needs emergencies by the assessee. The Doctors are not at all entitled to any employee benefits. The Doctors are not in direct control of the assessee hospital for rendering of their services. They attend the hospital on the specified day and time prefixed / allotted and mutually agreed between the assessee and the Doctors. The relationship of the assessee with the Doctors is purely in nature of professional consultancy and not that of employer - employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere should be an employeremployee relationship between the 2 parties. As such the relationship between the assessee hospital and doctors is that purely of a consultants and not of an employee - employer. 11. The detailed finding recorded by CIT(A) as reproduced above to the effect that there was no relationship between the assessee and the doctors as employer and employee, and that consultants are independent doctors, who are having their own private practice, therefore, the assessee was liable to deduct tax u/s.194J and not u/s.192 of the I.T. Act. 12. The AO has also held that the payment made directly by the patients to the doctors liable for deduction of tax u/s.194J. By the impugned order the CIT(A) deleted the tax and interest so levied by observing as under :- 6.3 I have considered the facts of the case, submission of the appellant and order u/s.201 (1)(1A). Considering the language of section 194J, it is stated that the same can be invoked only in 2 circumstances. a. Where any sum is credited to the account of the payee. b. Where any payment is made to the payee The section nowhere states that TDS has to be done on assumption. The A.O. has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual maintenance contract for keeping the said machinery equipments under maintenance. The AO held that services rendered by the supplier for maintenance of equipments is in the nature of technical services, liable for deduction u/s.194J of the Act. As per the said contract, the service provider is required to carry out the ongoing maintenance and inspection of all the equipment, special inspection of the equipment safety and functional @ inspection of the equipment. Similarly, he is also required to keep the record of all the preventive maintenance and periodic inspections and report the progress to the assessee through the agreed format. These services are of the routine nature and hence it cannot be said that the technical services are provided requiring the deduction of tax u/s. 194J of the Act. It is undisputed fact that the services only of the technical nature are covered u/s. 194J of the Act. In the present case, the maintenance contracts entered by the assessee with the service providers like Siemens, etc. are of the routine nature in order to ensure the smooth functioning of the Equipments. The purpose of the said maintenance is only to ensure the longer life of the equipm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, AMC pilotage contract. The assessee is running a port and in order to carry on the operations machineries such as heavy cranes, weigh bridge, elevator, EPBX systems are installed. The assessee awarded some contracts for repairs and maintenance of these machineries. Section 194C provides that any person responsible for paying any sum to any contractor for carrying out any work including supply of labour for carrying out any work in pursuance of a contract between the contractor and a specified person shall, at the item of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount one per cent of the payment as applicable of such sum as income-tax. The Apex court in the case of Associated Cement Co. Ltd. v. CIT [1993] 201 ITR 435 / 67 Taxman 346 held that any work means any work and not a work contract which has a special connotation in the lip law. Indeed, in the sub-section, the work referred to therein expressly includes supply labour to carry out a work. Work envisaged in the subsection, therefore, has a wide import and covers any work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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