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TMI Blog2021 (11) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... nsultant doctors under Section 194J of the Act instead of making it under Section 192 of the Act and thereby the assessee was called on to show-cause as to why order under Sections 201 and 201(1A) of the Act should not be passed for the assessment years under consideration. The assessee filed reply to the said show-cause notices along with the agreement entered by the assessee with 'in-house consultants' and appointment letter issued to salaried doctors. Rejecting the reply, the Assessing Officer passed the order under Sections 201 and 201(1A) of the Act concluding that the 'consultant doctors' of M/s. Hosmat - assessee are employees of the company and payment made to them is 'salary', not 'fees for professional services', thereby held the assessee as 'assessee in default' and raised the demand of tax and interest as under:- "Assessment Year 2011-12 : RS.4,55,98,910/- Assessment Year 2012-13 : Rs. 3,87,31,670/- Assessment Year 2013-14 : Rs. 3,21,80,820/-." 3. Being aggrieved, the assessee preferred appeals before the Commissioner of Income Tax (Appeals) who confirmed the order of the Assessing Officer in respect of 'in-house consultant doctors' and had given the relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o doctor and month to month. The difference between the employee/salaried doctors and consultant doctors as per the agreement is pointed out as under: Sl.No. Employee Consultant 1. Remuneration : Salary fixed on monthly basis. Professional/technical fees per month and incentives as per the company policy. 2. Timings: 7.30 a.m. to end of clinic 7.30 a.m. to 5.30 p.m. 3. Probation for a period of one year from the date of appointment. Agreed to work for minimum period 5 years. 4. Minimum Service requirements: No minimum service requirement. Minimum 5 years of service 5. Control: Work under the direction and to the satisfaction the Medical Director, the HOD and Vice- President. NIL 6. Clauses for Registration: 2 months notice should be served. 2 calendar months notice to be served. If not served for 5 years from date of joining cannot serve for a period of 2 years in Bangalore District. 7. Outside engagements: Cannot engage in any other work Can engage in outside engagements with permission of HOSMAT. 8. Rules and Regulations: As per hospital requirements applicable to employee. As per hospital requirements applicable to consultants. 9. Conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal income in the hands of the said 'in-house consultant doctors'. That being so, a different stand cannot be taken in respect of employer - assessee treating the income as 'salaried income' and the assessee as 'an assessee in default'. Learned counsel for the assessee has placed before us the details of the incentive paid for elective surgeries to one 'in-house consultant doctor' - Somanna to demonstrate that the remuneration is not fixed and it depends on the incentives which has a direct nexus to the number of surgeries/emergency cases/extended time after duty hours/admission/investigation etc., 7. Learned counsel for the Revenue argued that the broad test enunciated by the Co-ordinate bench of this Court in Manipal Health Systems (P.) Ltd., supra, would indicate the parameters to be applied for deciding the relationship of employer and employee. The Tribunal has rightly applied the principles laid down by the Co- ordinate bench of this Court in dismissing the appeal filed by the assessee considering the conditions of appointment of the 'in-house consultant doctors' as per the agreements entered into between the assessee and such other 'in-house consultant doctors'. As per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees. The consultant shall not be deemed to be an employee of the company". 15. 'Consultancy charges' in the ordinary sense means providing of expert knowledge to a third party for a fee. It is a service provided by a professional advisor. These consultant Doctors are rendering professional services as and when they are called upon to attend the patients. Profession implies any vocation carried by an individual or a group of individuals requiring predominantly intellectual skill, depending on individual characteristic of person(s) pursuing with the vocation, requiring specialized and advance education or expertise. Consultancy charges are paid to the Doctors towards rendering their professional skill and expertise which are purely in the nature of professional charges. Assesssee Company has no control over the Doctors engaged by them with regard to treatment of patients. xxxxxxx 17. It is also pertinent to note that the doctors have filed their return of income for the relevant assessment years showing the income received from the assesseee-Company as professional income and the same is said to have been accepted by the department." This Court has held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultants and as per the agreements, the said consultants shall be governed by the rules and regulations of service, conduct rules, discipline etc., Sl.No.16 of the said chart would read thus: "16. Other aspects such as fixed amount of payment every month, performance based incentive, leave facility, working hours, selection of doctors through interviews, availability of doctors through a pre-determined time schedule etc are only measures to ensure that there would be no interruption in provision of medical services to patients, hospitals etc." 12. In the case of Eli Lilly & Co. (India) (P.) Ltd., supra, the Hon'ble Apex Court has enunciated the legal principles on the scope and effect of Sections 201(1) and 201(1A) of the Act as under: "34. A perusal of Section 201(1) and Section 201(1A) shows that both these provisions are without prejudice to each other. It means that the provisions of both the sub-sections are to be considered independently without affecting the rights mentioned in either of the sub-sections. Further, interest under Section 201(1A) is compensatory measure for withholding the tax which ought to have gone to the exchequer. The levy of interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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