TMI Blog2016 (9) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... go to prove that it is a case of contract of service. It is also clear from clauses of the agreement placed at page 26 of the paper book that there is no independence to the consultant doctors, their working hours and service conditions are under the direct control and superintendence of the assessee. All these circumstances go to prove that the assessee is only making an attempt to camouflage real nature of the transaction by using clever phraseology. It is not the form but the substance of the transaction that matters. The nomenclature used may not be decisive or conclusive to determine the nature of transaction. Since consultant doctors were paid fixed remuneration and the working conditions are under supervision and control of the hospital authorities, in our considered opinion, services are rendered in the nature of employee. Hence, payments are subject to tax deduction at source u/s 192 of the Act. The assessee has failed to controvert the findings of the TDS officer that the terms and conditions of consultant doctors are same as that of salaried doctors. The fact that consultant doctors have declared their income under the head ‘professional charges’, has no bearing on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r work/business/service or carry out any other assignment or work in any other medical institution, hospital, nursing home or clinic while rendering professional services at HOSMAT without prior written consent/permission from HOSMAT. v. A consultant doctor agrees to work for a minimum period of 5 years from the date of joining the organization. If Consultant doctors decide to leave the organization within 5 years, then the Consultant doctors will not work in Bangalore District for 2 years from the date of leaving. vi. HOSMAT at its sole discretion is entitled to waive any term or envisaged in this agreement. vii. Remuneration of ₹ 60,000/- per month and incentives will be paid as per company policy (amount above is in case of consultant Dr. Somanna M S, and the amount various from doctor to doctor). viii. Consultant doctors will be governed by the rules and regulations of service, conduct rules, discipline and the standing order of HOSMAT for its consultants which are in force now or as may be amended, altered, extended or established from time to time and Consultant's acceptance of this offer, carries with it consultant's agreement to obey all such rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /permission from Hosmat. (c) In consideration to the services provided to Hosmat by the consultant, Hosmat Will pay the professional and technical fee as envisaged in Schedule 1. (d) Nothing in this agreement shall be interpreted as meaning that the consultant is an employee of HOSMAT, and therefore not entitled to any pension, gratuity or other fringe benefits from Hosmat. (e) The consultant has agreed to work for a minimum period of 5 years from the date of joining the organization. 4.3 Schedule 1 forming part of the agreement states the remuneration at ₹ 60,000/- per month, and incentives as per company policy. Description of services are mentioned to be enclosed but has not been submitted. The special conditions mentioned in the schedule, also refers to the mandatory medical fitness for which the tests will be carried out by HOSMAT. The appointment will be subject to satisfactory verification of character, age, educational and professional credentials. Further, the consultant shall be governed by the Rules and regulation of service, conduct rules, discipline and standing order of the Hosmat. The consultant shall also shoulder responsibility of teaching for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated to the patient and treatment to the specific patients. They are certainly not bound by the service rules of any particular hospital, and are not under their control and supervision. Payments by the hospital to such visiting doctors could not be said to be in the nature of salary requiring deduction of tax u/s 192. The assessment orders do not bring out the differences or uniformity in terms of engagement of the visiting doctors and the basis of payments to them, as compared to the in-house doctors. The amounts paid to the visiting doctors have to be considered as 'professional fees' where the tax has rightly been deducted u/s 194J by the appellant, and the same could not be said to be in the nature of 'salary'. Assessing Officer is directed to work out the relief accordingly, in respect of payments to the 'visiting doctors'. 4. Being aggrieved by the decision of the CIT(A) that remuneration paid to visiting doctors is liable for deduction of tax at source only under sec.194J, the revenue is in appeal before us in ITA Nos.879, 880 881/Bang/2014. 5. Being aggrieved by the decision of the CIT(A) that consultant doctors are salaried employees, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such regard. The learned CIT(A) failed to adjudicate this ground inspite of a specific ground before him. 9. The appellant submits and urges that there is no mechanism under section 201(1) to collect any short deducted or non deducted amount from an assessee in default in the absence of similar provision like that of section 206C(6) and consequently the authorities below ought to have held that the nothing is liable to be paid by the appellant on the facts and circumstance of the case. 10. The assessing officer erred in law in passing an order under section 201(1) and 201(1A) of the Act and could not have treated as an assessee in default in terms of section 191 of the Act as the twin conditions have not been satisfied on the facts and circumstances of the case. 11. The assessing officer erred in law in passing a common order in respect of four quarterly statements filed u/s 200 during a financial year and failed to appreciate that there is no concept of assessment year or financial year under the scheme of TDS and hence the orders passed by him are bad in law on the facts and circumstances of the case. 12. The authorities below failed to appreciate that the liability i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of contract ipso facto proves that the contract between the assessee-Company and the doctors is of contract for service not a contract of service . The remuneration paid to the doctors depends on the treatment to the patients. If the number of patients is more, remuneration would be on a higher side or if no patients, no remuneration. The income of the doctors varies, depending on the patients and their treatment. All these factors establish that there is no relationship of employer and employee between the assessee-Company and the doctors. Applying the above law to the facts of the present case from the terms of contract entered by the assessee with consultant doctors it is clear that remuneration is fixed irrespective of number of patients attended by the consultant doctors. The timings are fixed. Clause 7 of the said agreement also stipulates that consultant doctors are working with hospital for a minimum period of 5 years from the date of joining the organization. Further, it is submitted that in case consultant doctor leaves hospital within a period of 2 years and such doctor is barred from working in Bangalore District for a period of 2 years from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d their income under the head professional charges , has no bearing on the issue on hand. Accordingly, the assessee s appeals are dismissed. 8. As regards the revenue s appeals, the revenue is in appeal before us being aggrieved by the direction of the finding of the CIT(A) that remuneration paid to visiting doctors are subject to deduction only under the provisions of sec.194J of the Act. The revenue raised the following common grounds of appeal: 1. The CIT(A) has erred in holding that the amounts paid to the visiting doctors is not in the nature of salary and liable for deduction of tax at source u/s 194J as professional fees . 2. The CIT(A) has erred in not appreciating the facts that the terms and conditions of the assessee company with that of salaries doctors and the consultant doctors was the same. 3. The CIT(A) has erred in not appreciating the fact that an employer-employee relation existed between the assessee company and the consultants. 4. The CIT(A) has erred in not appreciating the fact that assessee hospital engaged some doctors as visiting consultants and as per the agreement these consultants would be governed by the rules and regulations of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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