TMI Blog2013 (6) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... vices to the referred patients without deducting tax as required under s. 194J of the FT Act. Therefore the AO has created the demand of ₹ 4,49,540 including interest of ₹ 64,617 under s. 201(1A). 2. Contentions of the assessee before the CIT(A) were as under: The present appeals have been filed against the order passed under s. 201/201(1A) by ITO (TDS), Ujjain treating the assessee deductor as assessee in default and required to pay the amount of TDS sought to be deducted by him as per the provisions of s. 194J of the Act. For the amounts paid out of the grant in aid received for the treatment of a particular patient from the State Government under M.P. State Measure Assistance Fund set up by then Government of Madhya Pradesh for the persons living BPL, paid to various approved hospitals which include all the investigation charges as well as doctor's consulting fee. The learned AO was of the opinion that these payments fall under the definition of fees and as such the assessee deductor was required to deduct tax at source as per the provisions of s. 194J of the Act. The assessee deductor failed to act accordingly, therefore treating the assessee in default an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Head. Out of such allocated fund the assessee has made the payment of ₹ 35,15,234 to various hospitals for the treatment of various such needy persons who qualify themselves for such aid of the Government during the said financial year. In this regard the assessee has already submitted before the learned AO copy of some sample orders for such approval of the various patients who have been sanctioned treatment of their respective diseases with amount sanctioned by the Collector out of the amount sanctioned out of this fund. After the approval of Collector the treatment of the patient was undertaken in the hospital for which the approval was obtained from the Collector. The patient is referred to the respective hospital on the recommendation of CMO and the undertaking of CMO for the payment of the treatment expenses. The patient was admitted in the hospital where all the expenses like room charges, investigation charges and cost of medicines including fees of doctors are being paid to the hospital by CMO. In this regard the assessee has submitted the complete record of Collector dt. 2nd April, 2008 in which various patients were approved for the treatment along with the sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny sum by way of-- (a) fees for professional services, or (b) fees for technical services, or (c) any sum referred to in cl. (va) of s. 28. shall, at the time of credit of such sum to the account of the payee 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 equal to ten per cent of such sum as income-tax on income comprised therein: Thus, from the plain reading of the provisions of s. 194J it is clear that as per cl. (a) of the section only fees which are being paid fall within the ambit of the provisions of s. 194J and not all the payments as made to such persons. Similarly as per the second proviso of the section all the individuals and HUF are not required to deduct tax as per the provisions of s. 194J where such payments are made for personal expenses of such persons. The second proviso reads as under: Provided also that no individual or an HUF referred to in the second proviso shall be liable to deduct income-tax on the sum by way of fees for professional services in case such sum is credited or paid exclusively for personal purposes of such individual or any member of HUF. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held that since there is no loss of revenue as tax has been paid by the recipients, no amount under s. 201 of the Act can be recovered. The assessee is enclosing herewith the necessary evidence in support of the fact that the respective recipients have discharged their respective tax liabilities under the Act with respect to their respective income. Thus it is most humbly submitted that looking to the facts of the case firstly the payments under consideration were made in the nature of personal expenditure of individuals, therefore, as per the second proviso to the s. 194J of the Act, requires any deduction of tax at source and lastly there is no revenue loss to the Department as the recipients have discharged their respective tax liabilities. 3. By the impugned order, the CIT(A) confirmed the action of the AO with respect to claim of interest under s. 201(1A) in respect of defaulted amount. However, by following the decision of the Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd. vs. CIT : (2007) 211 CTR (SC) 545 : (2007) 293 ITR 226 (SC) the liability created under s. 201(1) was deleted. 4. Against the order of the CIT(A), the assessee is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said to be professional fee paid to the doctors. In the instant case before us, professional services were rendered by hospitals/doctors directly to the low income group patients. However, the payments were made by the State Government on behalf of such patients, who are individuals. For the professional services rendered to the patients, bills were raised in the names of patients and not in the name of State Government. However, to provide assistance to the poor patients, payment was made by the State Government on behalf of such patients. Thus, the State Government acted as agent of such patients. Services were directly rendered by the hospitals/doctors to these patients who were responsible for making the payment. However, due to the scheme framed by the State Government for the patients below poverty level, the payment was routed through it. However, as per provisions of s. 194J, the assessee should be a person responsible to make payment. In the instant case, individual patients to whom treatment was given, were liable to make the payment, therefore, the first criteria of s. 194J, is not satisfied. The fact that hospitals/doctors rendered services to patients and pati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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