TMI Blog2019 (12) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... etween assessee and the concerned doctors were that of employee-employer and no demand could be raised under section 201(1) and 201(1A) of the Act. On the contrary, if there exist employee-employer relationship, the benefit may be granted to assessee upon verifying the additional evidence filed, which we have already admitted in preceding paras. Set aside appeals challenging demand raised under section 201(1) and 201(1A) of the Act, back to Ld.AO for de novo assessment. As we have set aside additions back to Ld.AO for verification on de novo basis, penalty levied under section 271C will not survive. However, the AO is at liberty to initiate penalty proceedings u/s 271C of the IT Act, 1961 in the set aside proceedings, if desired so. - ITA Nos.1262,1263(Bang)/2017, ITA Nos.1899 & 1900(B)/2019 - - - Dated:- 29-11-2019 - Shri B.R. Baskaran, Accountant Member And Smt. Beena Pillai, Judical Member For the Appellant : Shri K.P.Kumar, Sr. Advocate For the Revenue : Shri Sunil Kumar Aggarwal, Addl.CIT ORDER PER SMT. BEENA PILLAI, JM : Present appeals has been filed by assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perspective the fact that the consultant-doctors were not entitled to and were thus not given those benefits that only employees are statutorily entitled to such as PF, gratuity, leave encashment, retirement benefits etc., and that the said doctors were all specialized professionals required to perform only specific tasks / operations and not general day-to-day tasks. 8. That the CIT(A) erred in placing undue reliance on the terms of the letter of appointment without also properly examining the conduct of the Appellant and the consultant-doctors inter-se in the course of their engagement which would clearly go to show that there was no employer-employee relationship between the two. 9. That the CIT(A) erred in wholly failing to appreciate the clear distinction between a 'Contract for Service' and 'Contract of Service' with the contract between the Appellant and the consultant-doctors clearly and unmistakably falling within the ambit of the former. 10. That, without prejudice to the above and in any event, since the consultant-doctors have indisputably admitted and remitted the entire tax payable by them for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer (TDS), Ward-2(2), Bangalore ( AO for short), holding that the Appellant was liable to deduct taxes at source on the fees / remuneration paid to its consultant-doctors under Section 192 of the Income-tax Act, 1961 ( the Act for short), as against under Section 194J of the Act, as was done by the Appellant. 3. That the CIT(A) erred in upholding the AO's order treating the Appellant as an assessee in default. 4. That the CIT(A) grossly erred in concluding that there was an employer-employee relationship between the Appellant and its consultant doctors and that the remuneration paid to them by the Appellant was chargeable to tax under the head 'Salaries' necessitating deduction of tax at source under Section 192 of the Act. 5. That the CIT(A) completely failed to appreciate the significant terms on which the consultant-doctors performed their obligations and duties in the proper perspective inasmuch as they were not under the control and/or supervision of the Appellant while discharging their professional duties so much so that they were given a free hand in treating patients, fixing their own OP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. That the reliance placed by the CIT(A) on the decisions cited in the impugned order is wholly misplaced as the facts involved and the ratio emerging from the said decisions are not applicable to the facts of the instant case. 14. That the CIT(A) erred in observing that the consultant-doctors were entitled to a fixed remuneration irrespective of the number of patients / operations and also further erred in placing undue reliance on such an erroneous observation 15. That the CIT(A) erred in upholding the levy of interest under Section 201(1A) of the Act. 16. That, therefore, the CIT(A) erred in holding that there was no infirmity in order of the AO under Sections 201(1) and 201(1A) of the Act. 17. That the order of the CIT(A) is otherwise unsustainable in law and on facts and is thus liable to be set aside by this Hon'ble Tribunal. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, the above grounds of appeal, at any time before or during the hearing of the appeal. The Appellant further submits that the above grounds are independen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the above grounds of appeal. at any time before or during the hearing of the appeal. Relief The Appellant prays that this Hon'ble Tribunal be pleased to allow the appeal and set aside the impugned order dated 22.07.2019 and allow the appeal by quashing the order dated 23.10.2017 passed under Section 271C of the Act by the Respondent, in the interests of justice and equity. ITA No.1900/B/2019(2013-14) 1.That the orders passed by the Additional Commissioner of Income-tax, TDS Range - 3, Bangalore (hereinafter referred to as the Assessing Officer or AO ) and the Commissioner of Income-tax (Appeals) - 10 ( CIT(A) ), are bad in law and liable to be set aside. 2.That the AO erred in levying penalty under Section 271C of the Income-tax Act, 1961 ( the Act ), although the necessary requirements for levy of penalty under the said provision are not satisfied. The CIT(A) further erred in confirming the order passed by the AO. 3. That the AO erred in levying penalty under Section 271C of the Act on the ground that the Appellant had not deducted tax as required in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration paid to them was chargeable to tax under the head salary, and tax was to be deducted at source as per provisions of section 192 of the Act. Ld.AO accordingly issued show cause letter to assessee calling upon explanation as to why company should not be treated as assessee in default, in accordance with provisions of section 201 (1) read with section 201 (1A) of the Act, for short deduction of tax at average rate of tax on remuneration paid to such consultant doctors under section 192 of the Act. 2.1 Assessee in response to notice vide letter dated 15/01/13 submitted detailed discussions. The sum and substance of the submissions advanced by assessee was that consultant doctors were rendering their services and there was no employee employer relationship and that contract between hospital and such consultant doctors was of contract for service instead of contract of service . 2.2 It was further submitted that procedure for recruiting regular employee doctors and consultant doctors were different, as terms and conditions of their services were different. It was submitted that doctors who were employed with assessee provided services round-the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in default, as TDS provisions has been strictly followed by assessee. It was submitted that alleged nine doctors have paid taxes on amount received from assessee as professional fees. Ld.AR tendered application for admission of additional evidence under Rule 29 seeking admission of documents being form 26A along with affidavit of respective doctors. 3.1 Ld.AR submitted that in the event assessee succeeds on first proposition, there is no need to proceed with second proposition. Accordingly, he started his arguments to establish his case under first proposition and submitted as under: Ld.AR submitted that doctors were not regular doctors as terms and conditions entered into by nine doctors, were very much different from regular doctors, who were appointed on full-time basis. He placed reliance upon page 52-55 of paper book wherein terms and conditions for regular employee doctors, eligible for all basic benefits like HRA, travelling allowance, PF dearness allowance etc. Whereas page 56 is appointment letter of doctor specialised in a particular field on contract basis. He drew attention to a chart showing difference between regular employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tering and managing orthopaedic hospital. The areas of specialisation include trauma care, joint replacement, paediatric orthopaedics, sports medicine, lender reconstruction, bone tumour surgery, hand surgery, granny oh facial surgery, cosmetic/body contouring surgery, reconstructive surgery, Maxilio-facial surgery and congenital anomaly correction. Assessee deducted tax at source under section 194J of the Act, on remuneration paid to following nine doctors which are the subject matter of dispute. 1. Dr. Sharan Patil 2. Dr.Yohanan John 3. Dr.Ashok Raj Kaul 4. Dr.Prashant Tejamani 5. Dr.Prabhudev Basappa 6. Dr.Sharanu Patil 7. Dr.Sushil Nahar 8. Dr.Jayanth Sampath 9. Dr.S.Ravinarayan It is a case of assessee that remuneration drawn by these doctors are variable pay without any written contract whereas regular employee doctors drawing fixed salaries and are eligible for various service benefits and emoluments. It was thus, submitted by Ld.AR that remuneration advanced to these nine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book, wherein designation, Department to which doctor would be working and doctor to whom such doctor would report is clearly indicated. 4.4 We are therefore, of opinion that inference drawn by Ld. CIT (A)are on the basis of verification and documents of doctors, who do not form part of alleged list of contract doctors is not correct. In fact, entire finding of authorities below are on the basis of statement recorded and documents of doctors who are not part of list of doctors. 4.5 In the decision relied upon by Ld.AR in case of ITO (TDS) vs M/s.Teleradiology Solutions Pvt.Ltd, (supra), it is observed that facts are different, as it is a case of Diagnostic Centre and this Tribunal analysed appointments of doctors who issue various reports giving pathology findings. In present fats of case contracts placed at relevant pages in paper book are blank contracts, and therefore, we are unable to draw any inference in present facts, as there is nothing placed on record to analyse actual appointment letter issued by assessee to alleged nine doctors in order to decipher nature of services provided by them. Though, on face of it, sample blank appointment le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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