SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE, MUMBAI V. CIT (A) 21, MUMBAI

ITA 2681/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3433 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2681/MUM/2015 FOR ASSESSMENT YEAR: 2008-09 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE, PADMASHRI GORDHANBAPA CHOWK, RAJA RAMMOHAN ROY ROAD, MUMBAI-400004. PAN: AABTS7326N VS. THE DCIT, (TDS)- 3(2), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY MEHTA ( AR) REVENUE BY : B.S. BIST (DR) DATE OF HEARING : 28.07.2016 DATE OF PRONOUNCEMENT : 26.08.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT (A)-21, MUMBAI DATED 126.02.2015 FOR ASSESSMENT YEAR(AY) 2008-2009 RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER PASSED BY THE CIT(A) IS ILLEGAL, BAD I N LAW, ULTRA VIRES AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE AND WITHOUT APPRECIATING THE FACTS OF THE CASE IN THEIR PROPER PERSPECTIVE. 2. A) THE LEARNED CIT (A) ERRED IN CONFIRMING THE A CTION OF THE ASSESSING OFFICER (AO) THAT THE APPELLANT HAS FAILED TO COMPLY WITH T HE PROVISIONS OF SECTION 192 BY DEDUCTING TDS U/S 194J ON PAYMENT MADE TO FULL TIME CONSULTANTS CAUSING SHORT DEDUCTION OF TAX AT SOURCE OF RS.91,829/-. B) THE APPELLANT SUBMITS THAT ON THE FACTS AND CIRC UMSTANCES OF THE CASE THE TDS WAS RIGHTLY DEDUCTED U/S 194J OF THE INCOME TAX ACT . 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN RAISING TAX DEMAND U/S 201(1) IN RESPECT OF TAX DEDUCTIBLE WHERE THE RESPECTIVE D EDUCTEE HAVE PAID DUE AMOUNT OF TAXES. THE APPELLANT SUBMITS THAT WHEN THE DEDUC TEE PAYS THE TAXES DUE TO THE GOVERNMENT, NO TAX DEMAND U/S 201 (1) CAN BE RAISED ON THE TAX DEDUCTOR. 2 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE 2. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY U/S 1 33A OF THE I.T. ACT, 1961 WAS CONDUCTED IN CASE OF ASSESSEE ON 30.09.2010. ON VER IFICATION OF BOOKS OF ACCOUNTS AND FURNISHING INFORMATION DURING THE COURSE OF SUR VEY AND SUBSEQUENT PROCEEDINGS, IT WAS REVEALED THAT THE ASSESSEE-COMPANY FAILED TO MAKE TDS AS PER PROVISIONS OF CHAPTER XVII B OF THE ACT. DURING THE COURSE OF SUR VEY AND POST SURVEY PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN AS T O WHY THE PAYMENTS SHOULD NOT BE TREATED AS SALARY AND PAID TO THE DOCTORS ON WHI CH TAX IS DEDUCTIBLE U/S 192 OF THE ACT. THE ASSESSEE SUBMITTED ITS REPLY THAT THE DOCT OR ENGAGED BY THE ASSESSEE ARE RENDERING SERVICES TO THE HOSPITAL AS PROVIDED U/S 194J OF THE ACT. THERE IS NO EMPLOYEE-EMPLOYER RELATIONSHIP; THE DOCTORS/CONSULT ANTS ARE RETAINER-SHIP OF FEES FOR THE PERFORMANCE OF DUTIES ASSIGNED TO THEM. THE TERM LETTER OF ENGAGEMENTS ISSUED TO THEM DOES NOT INDICATE THAT THESE CONSULT ANTS ARE EMPLOYEES OF THE HOSPITAL AND SECTION 192 OF THE ACT IS NOT ATTRACTE D. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND THE ASSESSEE WAS HEL D IN DEFAULT FOR NON-DEDUCTION OF TAX ON THE PAYMENT OF FULL TIME CONSULTATION U/S 192 OF THE ACT. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED AN APPEAL BEFORE TH E CIT(A) BUT WITHOUT ANY SUCCESS. FURTHER, AGGRIEVED BY THE ORDER OF CIT(A), THE PRESENT APPEAL IS FILED BEFORE US. 3. LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE ARGUED THAT THERE IS NO RELATIONSHIP OF EMPLOYEE-EMPLOYER IN BETWEEN THE AS SESSEE AND THE DOCTORS ENGAGED BY THE ASSESSEE. AS THERE WAS NO EMPLOYEE-EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND DOCTORS THAT THE PROVISIONS OF SECTION 192 IS NOT ATTRACTED AGAINST THE ASSESSEE. LD. AR OF ASSESSEE FURTHER ARGUED THAT AL L THE DEDUCTEES ARE INCOME-TAX ASSESSEE AND PAYS THE DUE TAX TO THE GOVERNMENT AND NO TAX DETERMINED U/S 201(1) CAN BE RAISED AGAINST THE TAX DEDUCTOR/ASSESSEE. DR FOR THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO WHILE PASSING THE ORDER , OBSERVED THAT THE ASSESSEES HOSPITAL ENGAGED IN VISITING DOCTORS, FULL TIME CON SULTING DOCTORS AND RESIDENTIAL MEDICAL OFFICERS (RMOS) AND TAX IS BEING DEDUCTED A T SOURCE U/S 192 OF THE INCOME- TAX ACT TO RMOS AND U/S 194J ON THE PAYMENTS TO VIS ITING DOCTORS BUT THE TAX IS DEDUCTED U/S 194J IN RESPECT OF FULL TIME CONSULTAT ION. THE AO EXAMINED THE CONDITION OF THE ENGAGEMENT OF THE DOCTORS AND CONC LUDED THAT THE CONDITION OF DAILY ATTENDANCE INTO DEVOTE HIS EXPERTISE (ONLY TO THE HOSPITAL) CAN ONLY BE DICTATED 3 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE WITH THEIR EMPLOYEE-EMPLOYER RELATIONSHIP AND WHOLE OF THE DOCTORS ARE EMPLOYEE OF THE ASSESSEE-COMPANY AND TDS HAS TO BE DEDUCTED U/S 192 OF THE ACT. LD. CIT(A) DURING THE APPELLATE PROCEEDING, OBSERVED TH AT THE AO RIGHTLY HOLD THAT PAYMENTS MADE TO 23 DOCTORS TOTALLING TO RS. 38,79, 074/- AS REMUNERATION/SALARY AND NOT FEES FOR PROFESSION, SERVICE OR TECHNICAL SERVI CES. LD. CIT(A) FURTHER OBSERVED THAT DOCTORS ARE REGULAR EMPLOYEE OF THE ASSESSEE A ND ARE BOUND BY SERVICE CONDITIONS, HENCE, THERE IS EMPLOYEE-EMPLOYER RELAT IONSHIP. LD. CIT(A) CONCLUDED THAT WITH A VIEW TO CAMOUFLAGE FACTS, THE ASSESSEE PLAYED WITH THE WORDS THAT THESE DOCTORS ARE CONSULTANT AND ARE GIVEN RETAINER-SHIP OF THE PERFORMANCE OF DUTIES ASSIGNED TO THEM, INFACT THEY ARE EMPLOYEE ON REGUL AR BASIS AND THERE IS A TERM AND CONDITION IMPOSED BY THE EMPLOYER AND DOCTORS ARE O N THE PAY-ROLE AND THE EMPLOYEE OF THE HOSPITAL. 5. WE HAVE SEEN THAT NEITHER THE AO NOR THE CIT(A) TRI ED TO CLASSIFIED THE TERM AND CONDITION OF ENGAGEMENT OF DOCTORS VIS-A-VIS THE EM PLOYEE-EMPLOYER RELATIONSHIP. THE AO AND THE CIT(A) HAS NOT BRING ON RECORD, IF T HE DOCTORS ARE SUBJECT TO THE PAYMENT OF PROVIDENT FUND OR OTHER RETIREMENTAL BE NEFIT, THE AO HAS APPLIED HIS OWN NOTION FOR ARRIVING AT THE CONCLUSION THAT THER E IS EMPLOYEE-EMPLOYER RELATIONSHIP AND CONCLUDED THAT THEIR EXISTING RELA TIONSHIP OF EMPLOYEE-EMPLOYER. THE HONBLE JURISDICTIONAL HIGH COURT IN A RECENT D ECISION IN CIT VS. GRANT MEDICAL FOUNDATION IN ITA NO. 140/2013 DATED 22.01.2015 HEL D AS UNDER: 31) IN THE RECENT DECISION WHICH HAS BEEN DELIVERE D BY THE HON'BLE SUPREME COURT IN EMPLOYEES STATE INSURANCE CORPORATION CUM MEDICAL OFFICERS ASSOCIATION VS. EMPLOYEES STATE INSURANCE CORPORATI ON AND ANR, AIR 2014 SUPREME COURT, 1259, IN THE CONTEXT OF QUESTION WHE THER MEDICAL DOCTORS DISCHARGING FUNCTIONS OF MEDICAL OFFICERS TREATING PATIENTS IN EMPLOYEES INSURANCE CORPORATION DISPENSARY /HOSPITAL ARE WORK MEN WITHIN THE MEANING OF SECTION 2 (S) OF THE INDUSTRIAL DISPUTES ACT , 1947, THE COURT HELD AS UNDER: 'WE ARE OF THE VIEW THAT A MEDICAL PROFES SIONAL TREATING PATIENTS AND DIAGNOSING DISEASES CANNOT BE HELD TO BE A 'WORKMEN ' WITHIN THE MEANING OF SECTION 2(S) OF THE ID ACT. DOCTORS' PROFESSION IS A NOBLE PROF ESSION AND IS MAINLY DEDICATED TO SERVE THE SOCIETY, WHICH DEM ANDS PROFESSIONALISM AND ACCOUNTABILITY. DISTINCTION BETWEEN OCCUPATION AND PROFESSION IS OF PARAMOUNT IMPORTANCE. AN OCCUPATION IS A PRINCIPAL ACTIVITY RELATED TO JOB, WORK OR CALLING THAT EARNS REGULAR WAGES FOR A PERS ON AND A PROFESSION, ON THE OTHER HAND, REQUIRES EXTENSIVE TRAINING, STUDY AND MASTERY OF THE 4 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE SUBJECT, WHETHER IT IS TEACHING STUDENTS, PROVIDING LEGAL ADVICE OR TREATING PATIENTS OR DIAGNOSING DISEASES. PERSONS PERFORMING SUCH FUNCTIONS CANNOT BE SEEN AS A WORKMAN WITHIN THE MEANING OF SECTION 2(S) OF THE ID ACT. WE ARE OF THE VIEW THAT THE PRINCIPLE LAID DOWN BY THI S COURT IN A. SUNDARAMBAL'S CASE (SUPRA) AND IN MUIR MILLS'S CASE (SUPRA) SQUARELY APPLIES TO SUCH PROFESSIONALS. THAT BEING THE FACTU AL AND LEGAL POSITION, WE FIND NO REASONS TO INTERFERE WITH THE JUDGMENT OF T HE HIGH COURT. THE SLP LACKS MERIT AND IS DISMISSED ACCORDINGLY.' THIS DECISION IS RELEVANT ONLY FOR THE PURPOSE OF N OTING AS TO HOW DOCTORS' ROLE IS PERCEIVED AND IT IS CONSIDERED AS A NOBLE PROFESSIO N MAINLY DEDICATED TO SERVE THE SOCIETY WHICH DEMANDS PROFESSIONALISM AND ACCOUNTAB ILITY. A DISTINCTION BETWEEN OCCUPATION AND PROFESSION AND WHICH IS OF PARAMOUNT IMPORTANCE HAS BEEN NOTED. 32) IN THE CASE OF INDIAN MEDICAL ASSOCIATION VS. V.P. SHANTHA AND ORS REPORTED IN AIR 1996 SUPREME COURT, 550 WHAT WAS ADJUDICATED BY THE COURT IS WHY DOCTORS AND MEDICAL PROFESSIONALS WERE BROUGHT WITH IN THE PURVIEW OF THE CONSUMER PROTECTION ACT , 1986 AND IN RELATION TO THE SERVICES RENDERED BY THEM. THE ARGUMENT WAS THAT THE CONSUMER PROTECTION ACT DEFINES THE TERM 'SERVICE' IN SECTION 2 (1) (O) OF THE CONSUMER PROTECTION ACT , 1986. A DOCTOR PATIENT RELATIONSHIP IS OF MUTUAL TRUST AND CONFIDE NCE. A DOCTOR CANNOT BE SAID TO BE A SERVANT OF THE PATIENT. NEITHER THE PATIENT CA N BE TERMED AS HIS MASTER. THIS PECULIAR RELATIONSHIP WOULD, THEREFORE, ENABLE THE ASSOCIATION TO CONTEND THAT THE PARLIAMENT NEVER INTENDED TO BRING SUCH PR OFESSIONALS AND DOCTORS WHO WORK FOR THE WELFARE AND WELL BEING OF THE PATIENTS BY TREATING THEM AS SERVANTS OF ANYBODY. 33) IN FACT, THE CONSTITUTIONAL VALIDITY OF THE ACT AND IN THE BACKDROP OF THIS PECULIAR PROVISION WAS THE ISSUE BEFORE THE HON'BLE SUPREME COURT. 34) GOING BY THE PECULIAR DEFINITION AND THE CONSEQ UENCES WHICH WOULD FOLLOW IF ACTS OF NEGLIGENCE AND ATTRIBUTABLE TO DOCTORS AND MEDICAL PROFESSIONALS ARE NOT BROUGHT WITHIN THE PURVIEW OF THE ACT THAT THE HON' BLE SUPREME COURT UPHELD ITS VALIDITY AND NEGATIVED THE CHALLENGE. IN DOING THAT THE HON'BLE SUPREME COURT REFERRED TO THE WELL SETTLED TESTS WHICH COULD ENAB LE A COURT TO DISTINGUISH BETWEEN A CONTRACT OF SERVICE (A MASTER SERVANT REL ATIONSHIP) AND CONTRACT FOR SERVICE BEING SERVICES RENDERED AS A PROFESSIONAL. IN THAT CONTEXT, PARAGRAPHS 41 AND 42 OF THE DECISION READ AS UNDER : 5 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE '41. SHRI SALVE HAS URGED THAT THE RELATIONSHIP BET WEEN A MEDICAL PRACTITIONER AND THE PATIENT IS OF TRUST AND CONFIDENCE AND, THE REFORE, IT IS IN THE NATURE OF A CONTRACT OF PERSONAL SERVICE AND THE SERVICE REND ERED BY THE MEDICAL PRACTITIONER TO THE PATIENT IS NOT `SERVICE' UNDER SECTION 2(1)(O) OF THE ACT. THIS CONTENTION OF SHRI SALVE IGNORES THE WELL RECO GNISED DISTINCTION BETWEEN A `CONTRACT OF SERVICE' AND A `CONTRACT FOR SERVICE S'. [SEE :HALSBURY'S LAWS OF ENGLAND, 4TH EDN., VOL. 16, PARA 501; DHARANGADHARA CHEMICAL WORKS LTD V. STATE OF SAURASHTRA , 1957 SCR 152 AT P.157]. A `CONTRACT FOR SERVICES' IMPLIES A CONTRACT WHEREBY ONE PARTY UNDERTAKES TO RENDER SERVICES E.G. PROFESSIONAL OR TECHNICAL SERVICES, TO OR FOR ANOTH ER IN THE PERFORMANCE OF WHICH HE IS NOT SUBJECT TO DETAILED DIRECTION AND C ONTROL BUT EXERCISES PROFESSIONAL OR TECHNICAL SKILL AND USES HIS OWN KN OWLEDGE AND DISCRETION. [SEE : OXFORD COMPANION TO LAW, P. 1134]. A `CONTRA CT OF SERVICE' IMPLIES RELATIONSHIP OF MASTER AND SERVANT AND INVOLVES AN OBLIGATION TO OBEY ORDERS IN THE WORK TO BE PERFORMED AND AS TO ITS MODE AND MANNER OF PERFORMANCE. [SEE : STROUD'S JUDICIAL DICTIONARY, 5TH EDN., P. 5 40; SIMMONS V. HEATH LAUNDRY CO. (1910) 1 K.B.543; AND DHARANGADHARA CHE MICAL WORKS (SUPRA) AT P. 159]. WE ENTERTAIN NO DOUBT THAT PARL IAMENTARY DRAFTSMAN WAS AWARE OF THIS WELL ACCEPTED DISTINCTION BETWEEN 'CO NTRACT OF SERVICE' AND 'CONTRACT FOR SERVICES' AND HAS DELIBERATELY CHOSEN THE EXPRESSION `CONTRACT OF SERVICE' INSTEAD OF THE EXPRESSION `CONTRACT FOR SERVICES', IN THE EXCLUSIONARY PART OF THE DEFINITION OF `SERVICE' IN SECTION 2(1)(O) . THE REASON BEING THAT AN EMPLOYER CANNOT BE REGARDED AS A CONS UMER IN RESPECT OF THE SERVICES RENDERED BY HIS EMPLOYEE IN PURSUANCE OF A CONTRACT OF EMPLOYMENT. BY AFFIXING THE ADJECTIVE `PERSONAL' TO THE WORD 'S ERVICE' THE NATURE OF THE CONTRACTS WHICH ARE EXCLUDED IS NOT ALTERED. THE SA ID ADJECTIVE ONLY EMPHASIZES THAT WHAT IS SOUGHT TO BE EXCLUDED IS PE RSONAL SERVICE ONLY. THE EXPRESSION 'CONTRACT OF PERSONAL SERVICE' IN THE EX CLUSIONARY PART OF SECTION 2(1)(O) MUST, THEREFORE, BE CONSTRUED AS EXCLUDING THE SER VICES RENDERED BY AN EMPLOYEE TO HIS EMPLOYER UNDER THE CONTRACT OF P ERSONAL SERVICE FROM THE AMBIT OF THE EXPRESSION 'SERVICE'. 42.IT IS NO DOUBT TRUE THAT THE RELATIONSHIP BETWEEN A MEDICAL PRACTITIONER AND A PATIENT CARRIES WITHIN IT CERTAIN DEGREE OF M UTUAL CONFIDENCE AND TRUST AND, THEREFORE, THE SERVICES RENDERED BY THE MEDICA L PRACTITIONER CAN BE REGARDED AS SERVICES OF PERSONAL NATURE BUT SINCE T HERE IS NO RELATIONSHIP OF MASTER AND SERVANT BETWEEN THE DOCTOR AND THE PATIE NT THE CONTRACT BETWEEN THE MEDICAL PRACTITIONER AND HIS PATIENT CANNOT BE TREATED AS A CONTRACT OF PERSONAL SERVICE BUT IS A CONTRACT FOR SERVICES AND THE SERVICE RENDERED BY 6 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE THE MEDICAL PRACTITIONER TO HIS PATIENT UNDER SUCH A CONTRACT IS NOT COVERED BY THE EXCLUSIONARY PART OF THE DEFINITION OF `SERV ICE' CONTAINED IN SECTION 2(1)(O) OF THE ACT.' 35) WE ARE MINDFUL OF THE FACT THAT THESE OBSERVATI ONS MUST BE TREATED AS CONFINED TO THE INTERPRETATION OF THE PROVISIONS OF A DISTIN CT LEGISLATION. THAT LEGISLATION WAS PERCEIVED AND NOTED AS TAKING CARE OF THE INTER EST OF CONSUMERS AND OF VARIED CATEGORIES. IT IS IN RELATION TO BRINGING SERVICES AND OF ALL CATEGORIES RENDERED BY PROFESSIONALS FOR A FEE THAT THE HON'BLE SUPREME CO URT NEGATIVED THE CHALLENGE. 36) HOWEVER, WE ARE IN AGREEMENT WITH MR BAJPAI THA T THE FOUNDATION OR BASIS ON WHICH THE REVENUE AND THE ASSESSING OFFICER PROCEED ED WAS WHETHER THE CATEGORIES OF DOCTORS AND WHICH WERE BEFORE THE ASS ESSING OFFICER COULD BE SEEN AND TERMED AS AN EMPLOYEE OR SERVANT OF THE ASSESSE E. ABOUT THE CATEGORY OF DOCTORS AND WHO DRAW FIXED PAY WITHOUT ANY OTHER BE NEFIT BUT LIKE AN ORDINARY EMPLOYEE ENTITLED TO MEDICAL AND PROVIDENT FUND OR RETIREMENTAL BENEFITS, THERE IS NO DISPUTE. 37) IN RELATION TO OTHER CATEGORY OF DOCTORS THERE WAS A DISPUTE. THE ASSESSING OFFICER AND THE COMMISSIONER CONCLUDED THAT THOUGH THESE CATEGORIES OF DOCTORS HAD A FIXED REMUNERATION AND VARIABLE PAY BUT THEIR TERMS AND CONDITIONS OF EMPLOYMENT OR SERVICE WOULD BE CRUCIAL AND MATERIAL . IN RELATION TO TWO DOCTORS, NAMELY, DR ZIRPE AND DR PHADKE, THE CONTRACTS WERE TAKEN AS SAMPLE AND SCRUTINIZED MINUTELY. UPON SUCH A SCRUTINY THE TRIB UNAL NOTED THAT IT CANNOT BE SAID THAT THESE DOCTORS WERE EMPLOYEES. IF THE FIRS T PART OF THE COMMISSIONER'S ORDER INDICATES AS TO HOW THESE PERSONS OR DOCTORS WERE NOT TREATED BY THE ASSESSEE AS REGULAR EMPLOYEES FOR WANT OF BENEFITS LIKE PROVIDENT FUND, RETIREMENTAL BENEFIT, ETC., THEN, MERELY BECAUSE TH EY ARE REQUIRED TO SPEND CERTAIN FIXED TIME AT THE HOSPITAL, TREATING FIXED NUMBER O F PATIENTS AT THE HOSPITAL, ATTEND THEM AS OUT PATIENTS AND INDOOR PATIENTS DOES NOT M EAN THAT A EMPLOYER-EMPLOYEE RELATIONSHIP CAN BE CULLED OUT OR INFERRED. WE DO N OT SEE HOW MR GUPTA CAN FAULT SUCH CONCLUSIONS BY RELYING UPON DECISIONS WHICH HA VE BEEN RENDERED IN CASES OF DOCTORS HAVING A FIXED PAY AND TENURE. IN THAT CASE , BEFORE US, THERE IS NO DISPUTE. EVEN THE ASSESSEE ACCEPTS THE POSITION THAT THEY AR E THE EMPLOYEES OF THE ASSESSEE TRUST. 38) HOWEVER, IN CASES OF OTHER DOCTORS THE CONTRACT WOULD HAVE TO BE READ AS A WHOLE. IT WOULD HAVE TO BE READ IN THE BACKDROP OF THE RELATIONSHIP AND WHICH WAS OF ENGAGEMENT FOR CERTAIN PURPOSE AND TIME. THE SKILL OF THE DOCTORS AND THEIR EXPERTISE WERE THE FOUNDATION ON WHICH AN INV ITATION WAS EXTENDED TO THEM 7 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE TO BECOME PART OF THE ASSESSEE WHICH IS A PUBLIC CH ARITABLE TRUST AND RENDERING MEDICAL SERVICE. IF WELL KNOWN DOCTORS AND IN SPECI FIED FIELDS ARE INVITED TO JOIN SUCH HOSPITALS FOR A FEE OR HONORARIUM AND THERE AR E CERTAIN TERMS DRAWN SO AS TO UNDERSTAND THE RELATIONSHIP, THEN, IN EVERY CASE SU CH TERMS AND THE ATTENDANT CIRCUMSTANCES WOULD HAVE TO BE SEEN AND IN THEIR EN TIRETY BEFORE ARRIVING AT A CONCLUSION THAT THERE EXISTS A EMPLOYER-EMPLOYEE RE LATIONSHIP. THE TRIBUNAL FOUND THAT THE COMMISSIONER WAS IN ERROR. WE ALSO A GREE WITH THE TRIBUNAL BECAUSE IN THE COMMISSIONER'S ORDER IN RELATION TO THESE TWO DOCTORS THE FINDINGS ARE LITTLE CURIOUS. THE COMMISSIONER REFERRED TO TH E TESTS IN PARAGRAPH 9 OF THE ORDER AT RUNNING PAGE 62 AND AT INTERNAL PAGE 14 IN PARAGRAPH 10 THE COMMISSIONER CONCLUDED THAT DOCTORS DRAWING FIXED R EMUNERATION ARE FULL TIME EMPLOYEES.HOWEVER, IN RELATION TO THE SECOND CATEGO RY OF DOCTORS DRAWING FIXED PLUS VARIABLE PAY WITH WRITTEN CONTRACTS THE TERMS AND CONDITIONS OF DR ZIRPE AND DR PHADKE HAVE BEEN REFERRED AND THE TRIBUNAL CONCL UDED THAT NEITHER OF THE DOCTORS WAS ENTITLED TO PROVIDENT FUND OR ANY TERMI NAL BENEFITS. BOTH WERE FREE TO CARRY ON THEIR PRIVATE PRACTICE AT THEIR OWN CLINIC OR OUTSIDE HOSPITALS BUT BEYOND THE HOSPITAL TIMINGS. BOTH DOCTORS TREATED THEIR PR IVATE PATIENTS FROM THE HOSPITAL PREMISES. ALL OF WHICH COULD BE SEEN AS INDICATORS THAT THEY WERE NOT EMPLOYEES BUT INDEPENDENT PROFESSIONALS ( SEE PARAGRAPH 14). HOWEVER, THEY WERE FOUND TO BE SHARING A OVERWHELMING NUMBER OF ATTRIBUTES OF E MPLOYEES. IN RELATION TO THAT THE CONTRACT SEEMS TO HAVE BEEN BIFURCATED OR SPLIT UP OR READ IN BITS AND PIECES BY THE COMMISSIONER. THE LEAVE RULES WERE HELD TO B E APPLICABLE IN CASE OF DR PHADKE AND THERE WERE FIXED TIMING AND FIXED REMUNE RATION. NOW, IT IS INCONCEIVABLE THAT MERELY BECAUSE FOR A CERTAIN PER IOD OF TIME OR REQUIRED NUMBER OF HOURS THE DOCTORS HAVE TO BE AT RUBY HALL CLINIC MEANS THEY WILL NOT BE ENTITLED TO VISIT ANY OTHER HOSPITAL OR ATTEND P ATIENTS AT IT NECESSARILY. THE ANXIETY APPEARS IS NOT TO INCONVENIENCE THE PATIENT S VISITING AND SEEKING TREATMENT AT THE RUBY HALL CLINIC. IF SPECIALIZED T EAM OF DOCTORS, EXPERTS AND EXPERIENCED IN THE FIELD ARE PART OF THE ASSESSEE'S CLINIC, THEN, THEIR AVAILABILITY AT THE CLINIC HAS TO BE ENSURED. NOW, THE TREND IS TO PROVIDE ALL FACILITIES UNDER ONE ROOF SO THAT PATIENTS ARE NOT COMPELLED TO GO T O SEVERAL CLINICS OR HOSPITALS. HENCE, A DIAGNOSTIC CENTER WITH LABORATORIES AND CL INICS, CONSULTATION ROOMS, ROOMS WITH BEDS FOR INDOOR TREATMENT, CRITICAL CARE , TREATMENT FOR KIDNEY, LEVER, HEART, BRAIN, STOMACH AILMENTS ARE FACILITIES AVAIL ABLE AT CLINICS AND HOSPITALS. THE MANAGEMENT, THEREFORE, INSISTS THAT SUCH FACILI TIES, WHICH ARE VERY COSTLY AND EXPENSIVE ARE UTILIZED TO THE OPTIMUM AND THE INVES TMENT OF TIME, MONEY AND INFRASTRUCTURE IS NOT WASTED. HENCE, FIXED TIMINGS AND REQUIRED NUMBER OF HOURS AND SUCH STIPULATIONS ARE INCORPORATED IN CONTRACTS SO THAT THEY ARE OF BINDING NATURE.THE DOCTOR OR EXPERT MEDICAL PRACTITIONER IS THEN OBLIGED TO DENOTE HIS 8 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE TIME AND ENERGY TO THE CLINIC WHOLE HEARTEDLY. IF H ANDSOME REMUNERATION, FEE IS PRESCRIBED IN RETURN OF READY-MADE FACILITIES EVEN FOR PROFESSIONALS, THEN, SUCH INSISTENCE IS NOT NECESSARILY TO TREAT HIGHLY QUALI FIED PROFESSIONALS AS SERVANTS. IT IS A RELATIONSHIP OF MUTUAL TRUST AND CONFIDENCE FO R THE LARGER INTEREST OF THE PATIENT BEING SERVED EFFICIENTLY. FROM THIS CONTRAC T OR ANY CLAUSE THEREIN NO SUCH CONCLUSION COULD HAVE BEEN ARRIVED AT. WE DO NOT SE E HOW THERE WAS ANY EXPRESS BAR FROM WORKING AT ANY OTHER HOSPITAL AND IF THE C ONTRACTS WOULD HAVE BEEN PROPERLY AND CAREFULLY SCRUTINIZED. MERELY BECAUSE THEIR INCOME FROM THE HOSPITAL IS SUBSTANTIAL DOES NOT MEAN THAT TEN OUT OF THE FO URTEEN CRITERIA EVOLVED BY THE COMMISSIONER HAVE BEEN SATISFIED. THE ASSESSING OFF ICER AND THE COMMISSIONER, THEREFORE, WERE IN COMPLETE ERROR.WE HAVE ALSO PERU SED THESE CONTRACTS AND COPIES OF WHICH ARE ANNEXED TO THE PAPER BOOK BEING PART OF THE ORDER OF THE ASSESSING OFFICER. WE FIND THAT THE COMMUNICATIONS WHICH HAVE BEEN RELIED UPON, NAMELY, 25TH NOVEMBER, 2008 AND 14TH MAY, 2009 DO N OT CONTAIN ANY ADMISSION BY THE ASSESSEE. ALL THAT THE ASSESSEE ADMITTED IS THE EXISTENCE OF A WRITTEN CONTRACT AND WITH THE ABOVE TERMS. THOSE TERMS HAVE ALSO BEEN PERUSED BY US MINUTELY AND CAREFULLY. WE DO NOT FIND THAT ANY STI PULATIONS REGARDING WORKING HOURS, ACADEMIC LEAVE OR ATTACHMENTS WOULD REVEAL T HAT THESE DOCTORS ARE EMPLOYEES OF THE ASSESSEE. IN FACT, DR ZIRPE WAS AP POINTED AS A JUNIOR CONSULTANT ON THREE YEARS OF CONTRACT. HE WAS PAID EMOLUMENTS AT FIXED RATES FOR THE PATIENTS SEEN BY HIM IN THE OPD. THAT HE WOULD NOT BE PERMIT TED TO ENGAGE HIMSELF IN ANY HOSPITAL OR NURSING HOME ON PAY OR EMOLUMENTS CANNO T BE SEEN AS AN ISOLATED TERM OR STIPULATION. IN CASE OF DR UDAY PHADKE, WE DO NOT FIND ANY SUCH STIPULATION. IN THESE CIRCUMSTANCES, THE ONLY AGREE MENT BETWEEN THE PARTIES BEING THAT CERTAIN PRIVATE PATIENTS OR FIXED OR SPECIFIED NUMBER SEEN BY THE CONSULTANT COULD BE ADMITTED TO THE ASSESSEE HOSPITAL. THAT WO ULD NOT DENOTE A BINDING RELATIONSHIP OR A MASTER SERVANT ARRANGEMENT. A ATT RACTIVE OR BETTER TERM TO ATTRACT TALENTED YOUNG PROFESSIONALS AND TOO IN A C OMPETITIVE WORLD WOULD NOT MEAN TYING DOWN THE PERSON OR RESTRICTING HIS POTEN TIAL TO ONE SET UP ONLY. THE ARRANGEMENT MUST BE LOOKED IN ITS ENTIRETY AND ON T HE TOUCH STONE OF SETTLED PRINCIPLES. THE TRIBUNAL WAS RIGHT IN REVERSING THE FINDINGS OF THE ASSESSING OFFICER AND THE COMMISSIONER. THERE WAS A CLEAR PER VERSITY AND CONTRADICTION IN THE FINDINGS, PARTICULARLY POINTED OUT BY US HEREIN ABOVE. 39) IN RELATION TO OTHER DOCTORS WHERE THE REMUNERA TION WAS VARIABLE AND THERE WAS A WRITTEN CONTRACT OR NO WRITTEN CONTRACT THE C OMMISSIONER AND THE TRIBUNAL DID NOT COMMIT ANY ERROR AT ALL. BOTH HAVE REFERRED EXTENSIVELY TO THE MATERIALS ON RECORD. WE ARE NOT IN AGREEMENT WITH MR GUPTA THAT THE TRIBUNAL'S ORDER IS IN ANY WAY INCOMPLETE OR SKETCHY OR CRYPTIC. THE SETTL ED PRINCIPLES AND RENDERED IN 9 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE CO-ORDINATE BENCH DECISIONS HAVE BEEN REFERRED ONLY TO EMPHASIZE THE TESTS WHICH HAVE BEEN EVOLVED FROM TIME TO TIME. IT IS ONLY IN THE LIGHT OF SUCH TESTS AND THEIR APPLICABILITY TO INDIVIDUAL CASES THAT MATTERS OF T HIS NATURE MUST BE DECIDED. THIS APPROACH OF THE TRIBUNAL DID NOT REQUIRE IT TO REND ER ELABORATE OR LENGTHY FINDINGS AND WHEN IT AGREED WITH THE COMMISSIONER. WE DO NOT FIND EVEN IN THE CASE OF DR SUMIT BASU THE COMMISSIONER OR THE TRIBU NAL COMMITTED ANY ERROR. MERELY BECAUSE OF HIS STATURE HE WAS ENSURED AND GU ARANTEED A FIXED MONTHLY PAYMENT. THAT WOULD NOT MAKE HIM AN EMPLOYEE OF THE HOSPITAL. THIS CANNOT BE SEEN AS A STAND ALONE TERM. THERE ARE OTHER TERMS A ND CONDITIONS BASED ON WHICH THE ENTIRE RELATIONSHIP OF A CONSULTANT OR PROFESSI ONAL AND VISITING THE ASSESSEE'S HOSPITAL HAD BEEN DETERMINED.ONCE AGAIN, NO GENERAL RULE CAN BE LAID DOWN. NOWADAYS, PRIVATE MEDICAL CARE HAS BECOME IMPERATIV E. PUBLIC HOSPITALS CANNOT CATER TO THE INCREASING POPULATION. HENCE, P RIVATE HOSPITALS ARE ESTABLISHED AND CONTINUE TO BE FORMED AND SET UP DA Y BY DAY. THE QUALITY OF CARE, SERVICE, ATTENTION, ON ACCOUNT OF THE FINANCIAL CAP ACITY, THEREIN HAS FORCED PEOPLE OF ORDINARY MEANS ALSO TO VISIT THEM. SINCE SPECIAL ISTS ARE IN DEMAND BECAUSE OF THE LIFE STYLE DISEASES THAT CONSULTANTS AND DOCTOR S PREFER THESE HOSPITALS. SOMETIMES THEY HOP FROM ONE MEDICAL CENTRE OR CLINI C TO ANOTHER THROUGHOUT THE DAY. RETAINING THEM FOR FIXED DAYS AND SPECIFIED HO URS REQUIRES OFFERING THEM FRIENDLY TERMS AND CONDITIONS. IN SUCH CIRCUMSTANCE S, WE DO NOT THINK THAT THE TRIBUNAL COMMITTED ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD IN CONFIRMING THE FINDINGS RENDERED BY THE FIRST APPEL LATE AUTHORITY. THE FINDINGS OF FACT FROM PARAGRAPH 16 ONWARDS IN THE COMMISSIONER' S ORDER ON GROUND NO.2 AND FROM PARAGRAPH 20 ONWARDS ON GROUND NO.3 DO NOT SUF FER FROM ANY SERIOUS LEGAL INFIRMITY. THE APPRECIATION AND APPRAISAL OF THE FA CTUAL MATERIALS IS NOT SUCH AS WOULD ENABLE US TO INTERFERE IN OUR LIMITED JURISDI CTION. OUR FURTHER APPELLATE JURISDICTION IS LIMITED. 40) AS A RESULT OF THE ABOVE DISCUSSION, WE NEED NO T ADVERT TO THE ENTIRE CASE LAW IN THE FIELD. SUFFICE IT TO NOTE THAT THE REVENUE R ELIED ON THE JUDGMENTS WHICH WERE RENDERED IN CASES WHERE THE TERMS AND CONDITIONS DE NOTING EMPLOYEE AND EMPLOYER RELATIONSHIP INCLUDED A FIXED PAY OR MONTH LY REMUNERATION ONLY. FOR ALL THESE REASONS WE ARE OF THE OPINION THAT THE QUESTI ONS OF LAW TERMED AS SUBSTANTIAL AND FRAMED AS ABOVE WOULD HAVE TO BE AN SWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 6. NOW COMING TO THE FACTS OF THE PRESENT CASE, NEITHE R THE AO NOR THE LD CIT (A) GAVE THEIR FINDING THAT ANY OF THE CONDITION CONTAINED I N THE CONTRACT OF THE DOCTORS MANDATE THAT THERE WAS EMPLOYEE-EMPLOYER RELATIONSH IP BETWEEN THE ASSESSEE AND 10 ITA NO. 2681/M/15 SIR HURKISONDAS NURROTUMDAS HOSPITAL & RESEARCH CENTRE THEM, WHICH SPECIFICALLY MAY BRINGS THE DOCTORS I N THE CATEGORY OF EMPLOYEE. WE RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTION AL HIGH COURT IN CASE OF GRANT MEDICAL FOUNDATION (SUPRA) HELD THAT DOCTORS HAVE N O RELATIONSHIP OF EMPLOYEE- EMPLOYER WITH THE ASSESSEES HOSPITAL. THE DOCTORS ARE IN FACT INDEPENDENT PROFESSIONAL WHO MAY BE RECEIVING FIXED REMUNERATIO N DESPITE FIXED HOURS OF WORKS WHICH MAY SUBSTANTIALLY REGULATING THEIR APPLICATI ON FOR LEAVE AND OTHER DISCIPLINE. WITH THESE OBSERVATIONS, WE HOLD THAT THE DOCTORS A RE DISCHARGING ONLY PROFESSIONAL SERVICES AND THE ASSESSEE IS NOT LIABLE TO DEDUCT T AX U/S 192 OF THE ACT. THUS, THE APPEAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH AUGUST, 2016. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 26/08/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/