Case Law Details
CIT Vs TTK Healthcare TPA Pvt. Ltd. (Karnataka High Court)
The issue under consideration is whether Third Party Administrator (TPA) is required to deduct tax at source (TDS) on payments made to hospitals under Section 194J of the Income Tax Act?
High Court states that it cannot also be doubted that TDS has to be deducted for all services rendered by a person in the course of carrying on medical profession. Incidental or ancillary services which are connected with carrying on medical profession are included in the term “professional services” for the purpose of Section 194J. The words “services… in the course of carrying on medical profession” in Explanation (a) are used with the intention to include incidental, ancillary, adjunct or allied services connected with and relatable to medical services. As the term “professional services” has been specifically defined for the purpose of Section 194J, full effect to the said provision has to be given. What is covered and falls within the ambit of professional services are all services rendered in the course of medical profession or other professions. A corporate hospital offers services in the course of carrying on medical profession by the doctors who are associated with the hospital as consultants or as employees. The said doctors are professionals and income earned by them is professional income but Section 194J is attracted, not only when professional fee is paid for services rendered by the recipient but income/fee received by the recipient is towards services rendered in the course of carrying on medical profession. Thus payments/fee for the services specified should be to a person who is a resident and Section 194J is not confined to payments to the person who is a professional. Accordingly the question is answered in favour of revenue.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court vide order dated 16.07.2013 on the following substantial questions of law:
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