Case Law Details
DCIT Vs Fortis Hospital Ltd (ITAT Delhi)
Conclusion: No TDS under Section 192B on payments made to consultant doctors and retainer doctors as the provisions of section 194J applied to the retainer-doctors and not those of section 192B after noting differences between the two types of agreements i.e. salaried doctors and doctors appointed on retainership basis and the certain clauses in contract with retainers which gave the erroneous impression to AO of creating an employer-employee relationship had been explained by assessee that they did not create such a relationship.
Held: In the case of assessee-doctor, TDS survey under Section 133A(2A) was conducted at the premises of M/s. Fortis Group for verification of compliance with the TDS provision under Section 201(1)/201(1A). AO held that the payment to the consultant doctors and retainer doctors fell under the head “salary” and assessee was liable to deduct TDS from the payment to consultant doctors and retainer-doctors as well along with the on-roll doctors at the rate applicable in the case of salary. Since there was liability of Rs. 2,91,71,684/- under Section 192B and assessee had deducted tax at source of Rs. 1,10,06,561/-, assessee-company was held to be an ‘assessee in default’ for failure to deduct tax at source of Rs. 1,81,65,123/- passed by the Assistant Commissioner of Income Tax (ACIT) New Delhi under Section 201(1)/ 201(1A) of the Income Tax Act. It was held that the identical facts were examined in past years as well and the judicial consensus was that the provisions of section 194J apply to the retainer-doctors and not those of section 192B after noting differences between the two types of agreements i.e. salaried doctors and doctors appointed on retainership basis. Certain clauses in contract with retainers which gave the erroneous impression to AO of creating an employer-employee relationship had been explained by assessee that they did not create such a relationship. The explanation of assessee had unanimously been accepted by various judicial pronouncements. Thus, the appeal of the revenue was rejected.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal filed by the Revenue is directed against the order dated 31.10.2022 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2012-13.
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