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Case Law Details

Case Name : TTK Healthcare TPA Private Limited Vs DCIT-TDS (Karnataka High Court)
Appeal Number : ITA No. 303 of 2013
Date of Judgement/Order : 12/10/2020
Related Assessment Year : 2007-08
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TTK Healthcare TPA Private Limited Vs DCIT (Karnataka High Court)

The issue under consideration is whether a TPA, was required to deduct tax at source on payments made to hospitals under Section 194J of the Act?

The CBDT has by the circular taken the view that payments which are made by TPAs to hospitals fall within the purview of Section 194J. No exception can be taken to the circular to that extent, consistent with the interpretation placed on the provisions of Section 194J in the course of this judgment.

HC states that, they respectfully agree with the aforesaid findings recorded by the High Court and to the extent as held by the Bombay High Court, the impugned Circular is quashed. It is needless to state that the Assessing Officer and the Appellate Authority shall independently apply their minds in exercise of their quasi judicial powers without being influenced by the Circular. For the aforementioned reasons, HC are not inclined to agree to the submission made on behalf of the assessee that while interpreting Section 194J, the High Court of Bombay and Delhi High Court have enlarged the scope of the Act. In fact, the language employed in Section 194J is plain and unambiguous, which does not admit of any two interpretations. It is also the submission that the courts have rewritten or recast Section 194J while interpreting the same is also untenable. Since, Section 194J neither suffers from any ambiguity nor admits of two interpretations. The question of taking a view which is favorable to the assessee does not arise. In view of preceding analysis, as well for the reasons assigned by High Court of Bombay and Delhi High Court in Dedicated Healthcare Services supra and Vipul Medcorp supra, HC respectfully concur with the view taken by Bombay and Delhi High Court. As an upshot of aforesaid discussion, the substantial questions of law framed are answered in terms of the decisions of High courts of Bombay and Delhi i.e TDS U/S 194J will be applicable on payment made by TPAs to hospitals on behalf of insurance company.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

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