Commissioner of Income Tax (TDS) V. M/s. Yashoda Super Speciality Hospital

ITTA/196/2013

AI Insights

The case revolves around the classification of consultant doctors at M/s. Yashoda Super Speciality Hospital as either employees or independent contractors. The Income Tax Department appealed against the Tribunal's decision, which had set aside the order under Sections 201 and 201(A) of the Income Tax Act, concerning the non-deduction of tax at source on payments made to these doctors. The core legal issue was whether the payments to the doctors should be classified as salaries, which would attract tax deductions under Section 192 of the Income Tax Act. Both the Tribunal and the Commissioner of Income Tax (Appeals) found, based on the engagement agreements, that there was no employer-employee relationship, as the doctors were not under the administrative control of the hospital and had the freedom to manage their attendance and patient treatment independently.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 719114 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 04-07-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessment year 2008-2009; Consultant doctors; Employer-employee relationship; Income Tax
• Section: 201; 192; 260A; 201(A)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE FOURTH DAY OF JULY TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No. 196 OF 2013 Between: Commissioner of Income Tax(TDS) Hyderabad. ..... Appellant AND M/s. Yashoda Super Speciality Hospital, Shirdi Apartments, Somajiguda, Hyderabad. .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated 30.06.2010 in relation to the assessment year 2008-2009, on the following suggested questions of law: 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is justified in setting aside the order passed against the assessee under Secs.201 and 201(A) of the Income Tax Act? 2. Whether on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that there existed no relationship of employer and employee between the assessee and Consultant Doctors, employed in the Hospital, can be said to be based on material on record? The whole issue involved in this matter is whether the doctors are employees of the assessee or not, if so, payment made to the doctors are treated to be salaries so as to attract the provisions of Sec. 192 of the Income Tax Act. Learned Tribunal as well as the Commissioner of Income Tax (Appeals), on fact and on examining the document – agreement of engagement of the consultant doctors by the assessee, found that there is no relationship of employer and employee. After examining the agreement and various terms and conditions, it was found that the doctors are not administratively controlled or managed by the assessee and they are free to come at any point of time as far as their attendance is concerned and treat the patients. In the agreement, there is no provison for payment of any provident fund and gratuity. The only clause in the agreement is that the doctors cannot take up any other assignment. Reading the agreement as a whole, both the authorities below observed that the existence of one prohibitory clause, as stated above, does not change the basic character of the relationship between the assessee and the doctors concerned. On fact, the Tribunal found that there is no employer and employee relationship and their payment cannot be treated to be salaries and, as such, deduction cannot be made under Sec.192 of the Income Tax Act. We are of the view that the application of law depends upon the appreciation of facts. This court in exercise of the jurisdiction under Sec. 260A of the Income Tax Act, cannot re-appreciate the facts or substitute its own appreciation when appreciation of facts of both the authorities below was found to be rational and possible on given fact. The appreciation reached by both the authorities below has to be accepted by this court. On the given facts, this court can only examine whether the law has been applied properly or not. On careful reading of the impugned judgment and order, we are of the view that the law has been correctly applied. Therefore, we do not find any question of law involved in this matter. The Appeal is accordingly dismissed. No order as to costs. ______________________ Kalyan Jyoti Sengupta, CJ. __________ G.Rohini, J. July 04, 2013 MAS "