SAIFEE HOSPITAL TRUST, MUMBAI V. ACIT (TDS) 3(2), MUMBAI

ITA 387/MUM/2014

• Counselvise Citation: 38719914 RSA 2014
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 16-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Rectification of order
• Section: 194C; 201(1); 147; 145; 148; 54; 144; 154; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO . 387 / MUM/20 14 ( / ASSESSMENT YEAR : 20 1 1 - 2012) SAIFEE HOSPITAL TRUST , 15/17, MAHARSHI KARVE ROAD, MUMBAI - 400004 VS. ACIT(TDS) - 3(2), MUMBAI ./ ./ PAN/GIR NO. : A A B TS 7800 D ( / APPELLANT ) .. ( / RES PONDENT ) AND ./ ITA NO . 646 / MUM/20 14 ( / ASSESSMENT YEAR :201 1 - 2012) ACIT(TDS) - 3(2), M UMBAI VS. SAIFEE HOSPITAL TRUST, 15/17, MAHARSHI KARVE ROAD, MUMBAI - 400004 ./ ./ PAN/GIR NO. : A ABTS 7800 D ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI DHARMESH SHAH /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 06 /0 7 / 2015 / DATE OF PRONOUNCEMENT 16/09 /201 5 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) , MUMBAI , DATED 19 - 11 - 2013 FOR THE ASSESSMENT YEAR 20 11 - 2012 , IN THE MATTER OF ORDER PASSED U/S.201(1)/201(1A) OF THE ACT. ITA NO S . 387&646 / 14 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT A SURVEY U/S.133A WAS CONDUCTED IN THE CASE OF ASSESSEE. DURING THE COURSE OF SURVEY IT WAS FOUND THAT ASSESSEE HAS NOT PROPERLY DEDUCTED TAX AT SOURCE IN RESPECT OF PAYMENT MADE FOR HOSPITALITY SERVICES, DOCTORS FEES, ANNUAL MAINTENANCE CONTRARY PAYMENT. ACCORDINGLY, THE AO COMPUTED THE DIFFERENCE OF TAX U/S.201(1) AND ALSO CHARGED INTEREST U/S.201(1A) OF THE I.T. A CT. 3. BY THE IMPUGNED ORDER, THE CIT(A) UPHELD THE AOS ACT ION FOR NON - DEDUCTION OF TAX IN RESPECT OF ANNUAL MAINTENANCE CONTRACT AND HELD THE ASSESSEE LIABLE FOR TAX OF INTEREST THEREON. HOWEVER, IN RESPECT OF OTHER PAYMENTS, THE CIT(A) ACCEPTED ASSESSEES CONTENTION AND HELD THAT THE TAX WAS DEDUCTED AT PROPER R ATE, THEREFORE, THE ASSESSEE IS NOT IN DEFAULT U/S.201(1)/201(1A) OF THE I.T.ACT. 4. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE AND REVENUE ARE IN APPEALS BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSESSEE HAS ENTERED INTO CON TRACT AND PROVIDING CATERING AND ALLIED SERVICES, CONFINED TO SERVING FOOD AND BEVERAGES TO ITS STAFF MEMBERS, PATIENTS AND VISITORS WITH MONGINIS HOSPITALITY (CONTRACTOR), VIDE 'FACILITY MANAGEMENT AGREEMENT' EXECUTED ON 01.04.2009. THE COSTS OF MATERIALS , SERVICES AND OTHER UTILITIES ARE BORNE BY THE ASSESSEE HOSPITAL. THE SERVICES OF THE CONTRACTOR ARE MONITORED AND GOVERNED AS PER AGREEMENT EXECUTED BY THE ASSESSEE AND THE CONTRACTOR. THE CONTRACTOR IS REQUIRED TO PROVIDE THE SERVICES WITHIN THE PREMIS ES OF THE HOSPITAL BY PREPARING THE FOOD AS PER ITA NO S . 387&646 / 14 3 THE INSTRUCTIONS OF THE HOSPITAL AND SERVING THE SAME TO THE PATIENTS, CUSTOMERS, RELATIVES OF PATIENTS AND VISITORS. FOR THE SAID SERVICES, A SSESSEE PAYS 15% OVER AND ABOVE THE GROSS WAGE BILL ON MONTHLY BAS IS FOR THE STIPULATED NUMBER OF WORKMEN AS SERVICE CHARGE TO THE CONTRACTOR. HOWEVER, THE AO DID NOT ACCEPT ASSESSEES CONTENTION REGARDING ITS LIABILITY TO DEDUCT TAX U/S.19 4 C AND HELD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX U/S.190J OF THE I.T.ACT. 6 . BY THE IMPUGNED ORDER THE CIT(A) HELD THAT ASSESSEE WAS LIABLE TO DEDUCTION OF TAX U/S.194C OF THE ACT AFTER HAVING THE FOLLOWING OBSERVATION : - 7.3 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMISSION OF THE APPELLANT AND ORDER U/S.201(1)( 1A ) AND THE O RDER U/S.1 54 PASSED ON 27.12.2012. IN THAT ORDER THE AO RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF M/S. HINDUSTAN COCO - COLA BEVERAGE PVT. LTD. V. CIT [293 ITR 226] HAS DELETED/CANCELLED THE DEMAND SO CREATED AMOUNTING TO RS.1061450/ - . HOWEVER THE INTEREST ON THE SAME IS UPHELD. THEREFORE THE ISSUE THAT WHETHER TDS IS TO BE DEDUCTED U/S 194COR 194J ON ANNUAL M AINTENANCE CONTRACT(AMC) REMAINS. 7.4 ON. SIMILAR FACTS ,THIS ISSUE CAME UP FOR ADJUDICATION BEFORE HON'BLE ITAT (ASR) IN THE C ASE OF INCOME - TAX OFFICER' (T'DS), JAMMU. V IS. ACCOUNTS' OFFICER, GOVT. MEDICA L COLLEGE, JAMMU IN IT APPEAL NOS. 112 AND 113 (ASR.) OF 2011 FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 DATED MAY 7,2012. THE HON'BLE ITAT RLI3S INTER - ALIA HELD AS UNDER: '6.2 AS REGARDS THE APPEAL ON MERITS, AS ARGUED BY BOTH THE PARTIES AND FAC TS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT WHO LE ISSUE IS WITH REG ARD TO THE CONTRACTS ENTERED INTO BY THE ASSESSEE, WHICH IS A GOVT. MEDICAL COLLEGE AT J AMMU, HAS ENTERED INTO AGRE EMENTS WITH VARIOUS PARTIES TO MAINTAIN OPERATION THEATRE AND S URGICAL EQUIPMENTS. RO SYSTEM, C T SCAN MACHINE, MRI MACHINE, LIFT, STER I LISATION AND MEDICAL EQUIPMENTS ALONG' WITH ANTI - TERMITE TREATMENT AND ALSO THERE WERE CONTRACTS FOR SUPPLY OF BREAD AND BUTTER AND SUPPLY OF SECURITY AND PERSONNEL. AS REGARDS SUPPLY OF BREAD AND BUTTER AND SUPPLY OF SECURITY END PERSONNEL, WE DO NOT SEE ANY TECHNICAL PART OR TECHNICAL SERVICES A S PER FACTS AVAILABLE ON RECORD. AS REGARDS OTHER SERVICES, WHETHER THE SAME IS CONTRACT U/S 194C OF THE ACT OR TECHNICAL SERVICE U/S 194 J OF THE ACT, HAS TO BE PERUSED. THE ASSESSEE HAS CLAIMED A CONTRACT U/S 194C OF THE ACT. THEREFORE, WE HAVE TO PERUSE WHETHER THE PROFE SSIONAL OR TECHNICAL SERVICES U/ S 194 J OF THE ACT, WHICH PROVI DES ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY ITA NO S . 387&646 / 14 4 OF (A) FEES FOR PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES, SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUN T OF THE PAYEE OR A: THE TIME OF PAYMENT THERE OF CA SH OR BY ISSUE OF A CHEQUE OR DRAFT 'OR BY ANY OTHER MODE WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO TEN PERCENT OF SUCH SUM AS INCOME - TAX ON INCOME COMPRISED THEREIN. THIS 10% HAS BEEN INSERTED BY TH E FINANCE ACT W.E.F 01.06.2007 IN PLACE OF 5%. AS PER EXPLANATION OF SECTION 194J, PROFESSIONAL SERVICES AND FEES FOR TECHNICAL SERVICES HAS BEEN DEFINED AS UNDER: EXPLANATION - FOR THE PURPOSES OF THIS SECTION: (A) 'PROFESSIONAL SERVICES' MEANS SERVIC ES RENDERED BY A PERSON IN THE COURSE OF 'CARRYING ON LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADVERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOA RD FOR THE PURPOSES OF SECTION 44AA OR OF THIS SECTION; (B) 'FEES FOR TECHNICAL SERVICES' 50011 HAVE THE SAME MEANING AS IN EXP L ANATION 2 TO CLAUSE (VII) OF SUB - SECTION ( L) OF SECTION 9; 6.3 AS P E R SECTION 9(1)(VII) - EXPLANATION (2) - THE TECHNICAL SE RVICES HAVE BEEN DEFINED AS UNDER: . EXPLANATION [2) - FOR THE PURPOSES OF THIS CLAUSE, 'FEES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING .ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANA G ERIAL, 'TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEA BLE U NDER THE HEAD 'SALARIES' 6.4 AS PER SAID EXPLANATION IN SECTION 9(1), THE FEES FOR TECHNICAL SERVICES MEANS ANY CONSIDERATION FOR THE RENDERING OF ANY MANAGERIAL , TECHNICAL OR CONSULTANCY SERVICES INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHE R PERSONNEL, IS A PART OF TECHNICAL SERVICES AND FEES PAID FOR THAT SHALL BE CONSIDERED FOR THE PU RPOSE OF SECTION 194 J OF THE ACT. IN THE, PRESENT CASE, ON PERUSAL OF THE VARIOUS AGREEMENTS PLACED ON RECORD BY THE ASSESSEE THAT FIRSTLY WITH REGARD TO THEA TRE AND SURGICAL OPERATION WITH M/ S, THERMTRONICS KRILOSKER PVT. LTD. AS PER CONDITIONS MENTIONED IN THE A G R E EMENT IN CLAUSES (I ) TO (VI), THE SERVICES OF A TECHNICAL QUALIFIED PERSON ARE TO BE, MADE AVAILABLE TO THE ASSESSEE TO MAINTAIN EQUIPMENTS AND THE REFORE, THE SAID TECHNICAL SERVICES AS PER CBDT CIRCULAR 715 DATED 8 . 8 .1 995 CANNOT BE SERVICES OF ROUTINE AND NORMAL MAINTENANCE. THE OPERATION THEATRE AND SURGICAL ARE HIGHLY TECHNICAL EQUIPMENTS FOR THE OPERATIONS OF THE PERSONS . THEREFORE, THEY CANNOT B E MAINTAINED IN A ROUTINE OR NORMAL MANNER, BUT A TECHNICAL PERSON IS REQUIRED FOR MAINTENANCE OF SUCH EQUIPMENTS. SIMILAR IS THE CASE WITH RO SYSTEM, CT SCAN MACHINE, MRL MACHINE, LIFT AND STER I LISATION & MEDICAL EQUIPMENTS FOR THE AGREEMENTS MADE BETWEEN MI 5. RIDHAM MARKETING SERVICES, M/ S. WIPRO GE MEDICA L SYSTEM, M/ S. SIEMENS LTD M/ S. OT I S ELEVATOR AND M / S. EXPERT TECHNICAL SERVICE RESPECTIVELY. TH EREFORE , WE ARE OF THE VIEW THAT THESE ITA NO S . 387&646 / 14 5 CONTRACTS CANNOT BE THE CONTRACTS IN A ROUTINE OR NORMAL MANNER BUT FOR WHICH TECHNICAL SERVICE HAS .BEEN RENDERED AND PROVISIONS OF SECTION 194J READ WITH SECTION 9(1) OF EXPLANATION - 2 ARE ATTRACTED, READ WITH SECTION 201(1) AND 201(1A), WHICH THE A O HAS RIGHTLY APPLIED. WE FIND NO INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER IN THI S REGARD. ' 7.5 ADVERTING ,TO THE FACT IN THE INSTANT CASE IT IS SEEN THAT THE EQUIPMENTS ARE HIGHLY SPECIALIZED. THEREFORE, THEY CANNOT BE MAINTAIN OR NORMAL MANNER, BUT A TECHNICAL PERSON IS REQUIRED FOR MAINTENANCE, OF SUCH EQUIPME NTS . THEREFORE, IN MY CONSIDERED OPINION IT IS HELD THAT THESE CONTRACTS CANNOT BE THE CONTRACTS IN A ROUTINE OR NORMAL MANNER BUT FOR WHICH TECHNICAL SERVICE HAS BEEN RENDERED AND PROVISIONS OF SECTION 194J READ WITH ,SECTION 9(1) OF EXPLANATIO N - 2 ARE ATTRACTE D, READ WITH SECTION 201 (1) AND 201 (1A), WHICH THE AO HAS RIGHTLY APPLIED. ACCORDINGLY, THE ACTION OF THE A.O.IS UPHELD. GROUND IS DISMISSED. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO GONE TH ROUGH THE TERMS OF AGREEMENT ENTERED WITH THE CONTRA CTOR REFLECTING THE NATURE OF SERVICES RENDERED, WHICH CLEARLY SHOWS THAT THE PRINCIPLE SERVICES RENDERED BY THE CONTRACTOR MONGINIS ARE COOKING OF FOOD AND SUPPLY OF TRAINED WORKFORCE TO SERVE THE SAID FOOD. BY NO STRETCH OF IMAGINATION SUCH SERVICES OF P REPARATION OF FOOD AND SERVING THEM TO PEOPLE AMOUNTS TO PROFESSIONAL FEES AS ALLEGED BY THE AO. THE DEFINITION OF THE TERM WORK IN RESPECT OF WHICH THE PROVISIONS OF S.194C OF THE ACT ARE APPLICABLE INCLUDES THE SERVICES IN THE NATURE OF CATERING. AS AL READY NOTED IN THE CLAUSES OF THE AGREEMENT, THE NATURE OF THE WORK CARRIED OUT BY THE ASSESSEE IS PREPARATION OF FOOD AND SERVING THE SAME TO VARIOUS PEOPLE. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR HOLDING THAT THE ASSESSEE WA S LIABLE TO DEDUCT TAX AT SOURCE U/S.194C OF THE ACT, IN RESPECT OF PAYMENTS MADE FOR CATERING SERVICES. 8. THE AO ALSO HELD THAT ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE FROM PAYMENT MADE TO DOCTORS U/S.192 INSTEAD OF SECTION 194J OF THE ACT. ITA NO S . 387&646 / 14 6 9. BY THE IMPUGNED ORDER THE CIT(A) HELD THAT ASSESSEE HAS CORRECTLY DEDUCTED TAX AT SOURCE U/S.194J AFTER HAVING THE FOLLOWING OBSERVATION : - 5.3 I HAVE CONSIDERED THE ,FACTS OF THE CASE, SUBMISSION OF THE APPELLANT AND ORDER U/S.201 (1 )(1A). AFTER PASSING OF THE ORDER IN APPEAL THE AO RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF M/S.HINDUSTAN COCO - COLA BEVERAGE PVT. LTD. VS. CIT (293 ITR 226) HAS U/S.154 RECTIFIED THE ORDER ON 27 - 12 - 2012 AND DELETED/CANCELLED THE DEMAND SO CREATED AMOUNTING TO RS.23,11,157/ - . HOWEVER, THE INTEREST ON THE SAME IS UPHELD. THEREFORE, THE ISSUE THAT WHETHER TDS IS TO BE DEDUCTED U/S.194J OR 192 FOR PAYMENT TO DOCTORS, REMAINS. 10. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE AO HAS TREATED THE DOCTO RS AS UNDER EMPLOYMENT OF THE ASSESSEE, ACCORDINGLY LIABLE TO DEDUCTION OF TAX U/S.192. FROM THE RECORD WE FOUND THAT PAYMENTS WERE NOT MADE TO DOCTORS TREATING THE SAID PAYMENTS AS SALARIES ELIGIBLE FOR DEDUCTION OF TAX U/ S. 192 OF THE ACT INSTEAD OF 194J OF THE ACT. T HE DOCTORS ARE INDIVIDUAL DOCTORS AND ENTITLED TO HAVE INDEPENDENT PRACTICE. AS SUCH, THEY ARE NOT ON THE PAY ROLL OF THE ASSESSEE AND THEIR SERVICES ARE AVAILED ON ROTATION BASIS FIXED AS PER THE NEEDS EMERGENCIES BY THE ASSESSEE. THE DOCTOR S ARE NOT AT ALL ENTITLED TO ANY EMPLOYEE BENEFITS. THE DOCTORS ARE NOT IN DIRECT CONTROL OF THE ASSESSEE HOSPITAL FOR RENDERING OF THEIR SERVICES. THEY ATTEND THE HOSPITAL ON THE SPECIFIED DAY AND TIME PREFIXED / ALLOTTED AND MUTUALLY AGREED BETWEEN THE A SSESSEE AND THE DOCTORS. THE RELATIONSHIP OF THE ASSESSEE WITH THE DOCTORS IS PURELY IN NATURE OF PROFESSIONAL CONSULTANCY AND NOT THAT OF EMPLOYER - EMPLOYEE. WE HAVE ALSO VERIFIED THE CONSULTANCY AGREEMENT ENTERED WITH THE DOCTOR AND FOUND THAT THE SAID CONSULTANCY AGREEMENT IS ENTERED INTO TO OBTAIN SERVICES OF THE CONSULTING DOCTORS ON ITA NO S . 387&646 / 14 7 RETAINER / CONSULTANCY BASIS FOR PROVIDING VARIOUS SERVICES TO THE HOSPITAL. WE ALSO FOUND THAT THE SERVICES RENDERED BY SUCH DOCTORS ARE ONLY FOR SPECIFIED TIME WHICH M AY BE MUTUALLY AGREED UPON BETWEEN THE PARTIES. FURTHER THE AGREEMENT ALSO PERMITTED THE CONSULTANTS TO CARRY OUT THE IR INDEPENDENT PROFESSIONAL SERVICES. THE ABOVE UNDERSTANDING IS EVIDENT FROM THE FOLLOWING CLAUSES OF THE AGREEMENT WHICH ARE REPRODUCED B ELOW: '(3) THE CONSULTANT SHALL BE PAID A RETAINER FEES/CONSULTANCY FEE OF RS.27,563/ - PER MONTH FOR HER CONSULTANCY SERVICES TO THE HOSPITAL SUBJECT TO TAX AND OTHER APPLICABLE DEDUCTIONS AT SOURCE FROM THE RETAINER FEE / CONSULTANCY FEE AT THE RATES AS APPLICABLE FROM TIME TO TIME AS ADVISED TO THE HOSPITAL. HOWEVER, PROFESSIONAL TAX OR ANY OTHER TAX, CESS OR DUTY (INCLUDING BUT NOT LIMITED TO SERVICE TAX, IF APPLICABLE) SHALL BE THE INDIVIDUAL RESPONSIBILITY AND SHOT! BE BORNE BY THE CONSULTANT ALONG WI THOUT ANY LIABILITY ON THE PART OF THE HOSPITAL. .. .. (6) THE CONSULTATION TIMING ALLOTTED TO THE CONSULTANT SHALL BE MUTUALLY AGREED BETWEEN THE HOSPITAL AND THE CONSULTANT. THE TIME SLOT SO ALLOTTED TO THE CONSULTANT MAY BE CHANGED OR RESCHEDULED BY THE HOSPITAL AS AND WHEN NECESSARY. (7) NOTHING CONTAINED IN CLAUSE 6 SHALL PRECLUDE THE CONSULTANT FROM RENDERING PROFESSIONAL SERVICES AND THE SAME SHALL NOT CONFLICT WITH PROVISION UN DER CLAUSE 6 OF THIS AGREEMENT. THE CONSULTANTS ARE INDEPENDENT DOCTORS, WHO ARE ALSO HAVING THEIR OWN PRIVATE PRACTICE. THEY ARE NOT BOUND TO ADHERE TO FIXED TIMINGS OF THE HOSPITAL AS REQUIRED BY THE RMOS OR ANY OTHER NURSING / ADMINISTRATIVE STAFF. THE CONSULTANTS ARE ALLOWED TO CARRY OUT AND RENDER INDEPENDENT PRO FESSIONAL SERVICES APART FROM THE SERVICES PROVIDED TO THE APPELLANT HOSPITAL. FURTHER, THE AGREEMENT IS ALSO TERMED AS CONSULTANCY AGREEMENT AND NOT THE EMPLOYMENT AGREEMENT. SIMILARLY, THE TERMS OF PAYMENTS ARE ALSO IN CONNECTION WITH THE CONSULTANCY SER VICES. MOREOVER, NONE OF THE ITA NO S . 387&646 / 14 8 CLAUSES REFLECTS THE NATURE OF RELATIONSHIP TO BE THAT OF EMPLOYER- EMPLOYEE BETWEEN THE 2 PARTIES. IN ORDER TO BRING THE PAYMENTS WITHIN THE SCOPE OF S. 192 OF THE ACT, IT IS NECESSARY THAT THERE SHOULD BE AN EMPLOYER- EMPLOYE E RELATIONSHIP BETWEEN THE 2 PARTIES. AS SUCH THE RELATIONSHIP BETWEEN THE ASSESSEE HOSPITAL AND DOCTORS IS THAT PURELY OF A CONSULTANTS AND NOT OF AN EMPLOYEE - EMPLOYER. 11. THE DETAILED FINDING RECORDED BY CIT(A) AS REPRODUCED ABOVE TO THE EFFECT THAT THERE WAS NO RELATIONSHIP BETWEEN THE ASSESSEE AND THE DOCTORS AS EMPLOYER AND EMPLOYEE, AND THAT CONSULTANTS ARE INDEPENDENT DOCTORS, WHO ARE HAV ING THEIR OWN PRIVATE PRACTICE, THEREFORE, THE ASSESSEE WAS LIABLE TO DEDUCT TAX U/S.194J AND NOT U/S.192 OF T HE I.T. ACT. 1 2 . THE AO HAS ALSO HELD THAT THE PAYMENT MADE DIRECTLY BY THE PATIENTS TO THE DOCTORS LIABLE FOR DEDUCTION OF TAX U/S.194J. BY THE IMPUGNED ORDER THE CIT(A) DELETED THE TAX AND INTEREST SO LEVIED BY OBSERVING AS UNDER : - 6.3 I HAVE CONSIDE RED THE FACTS OF THE CASE, SUBMISSION OF THE APPELLANT AND ORDER U/S.201 (1)(1A). CONSIDERING THE LANGUAGE OF SECTION 194J, IT IS STATED THAT THE SAME CAN BE INVOKED ONLY IN 2 CIRCUMSTANCES. A. WHERE ANY SUM IS CREDITED TO THE ACCOUNT OF THE PAYEE. B.' WHERE ANY PAYMENT IS MADE TO THE PAYEE THE SECTION NOWHERE STATES THAT TDS HAS TO BE DONE ON ASSUMPTION. THE A.O. HAS NOT BROUGHT OUT ANY EVIDENCE ON RECORD TO SHOW THAT THE HOSPITAL HAS CREDITED THE 75% OF THE FEES TO THE ACCOUNT OF THE DOCTORS OR THE HOSPITAL HAS PAID TO THE DOCTOR'S ANY FEES IN THIS REGARD. IN ABSENCE OF THE AMOUNT BEING CREDITED OR PAID IN DOCTOR'S ACCOUNT, IN VIEW OF THE EXPRESS PROVISION OF LAW, TDS CANNOT BE DONE ON MERE ASSUMPTION, CONJECTURE AND SURMISES. THE CONCEPT OF PREPONDE RANCE OF PROBABILITY DOES NOT HOLD GOOD FOR TDS PROVISIONS. IN ABSENCE OF ANY TANGIBLE EVIDENCE AND N:ATERIAL ON THE ISSUE THAT THE AMOUNT OF PROFESSIONAL FEES AS ENVISAGED BY ITA NO S . 387&646 / 14 9 THE A.O. IS CREDITED OR PAID IN THE DOCTOR'S ACCOUNT THE AO IS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 194J. SINCE NO EVIDENCE IS BROUGHT ON RECORD TO SHOW THAT THE AMOUNT IS CREDITED TO THE ACCOUNT OF DOCTOR OR ANY PAYMENT IS. MADE TO DOCTOR, THE ADDITION OF RS.32, 93,247 STANDS DELETED AS THE CONDITION STIPULATED U/S.194 J IS NOT SATISFIED. 13. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT AS A PRACTICE, THE DOCTORS ARE ENTITLED TO FEES FOR THE SERVICES RENDERED BY THEM TO THE PATIENTS ADMITTED IN THE HOSPITAL, BASED ON THE FEES NEGOTIATED BETWEEN THE DOCTORS AND THE HOSPITAL. THESE FEES ARE NEGOTIATED BASED ON THE NATURE OF SERVICES RENDERED, THE NUMBER OF VISITS, THE CLASS OF THE WARD WHERE THE PATIENT IS ADMITTED, ETC. THESE FEES ARE EITHER CHARGED THROUGH THE HOSPITAL OR RECOVERED DIRECTLY BY THE DOCTORS FROM T HE PATIENTS. 14. AFTER RECORDING DETAILED FINDING AT PARA 6.3, THE CIT(A) HELD THAT THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 194J IN THE ABSENCE OF ANY TANGIBLE EVIDENCE AND MATERIAL TO SHOW THAT THE AMOUNT OF PROFESSIONAL FEES AS ENVISAGED BY THE AO WAS CREDITED OR PAID IN DOCTORS ACCOUNT BY THE ASSESSEE. THE DETAILED FINDING RECORDED BY THE CIT(A) HAS NOT BEEN CONTROVERTED. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) FOR NOT INVOKING THE PROVISIONS OF SECTION 194J WITH RESPE CT TO THE PAYMENTS DIRECTLY MADE BY THE PATIENTS TO THE DOCTORS. 15. THE AO HAS ALSO APPLIED PROVISIONS OF SECTION 194J WITH RESPECT TO THE ANNUAL MAINTENANCE CONTRACT PAID FOR MAINTENANCE OF PLANT AND MACHINERY. BY THE IMPUGNED ORDER THE CIT(A) CONFIRME D THE ACTION OF THE AO, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 16. FROM THE RECORD WE FOUND THAT THE ASSESSEE HAS TAKEN MEDICAL EQUIPMENTS FROM RENOWNED MANUFACTURERS AND ENTERED INTO ANNUAL ITA NO S . 387&646 / 14 10 MAINTENANCE CONTRACT FOR KEEPING THE SAID MAC HINERY EQUIPMENTS UNDER MAINTENANCE. THE AO HELD THAT SERVICES RENDERED BY THE SUPPLIER FOR MAINTENANCE OF EQUIPMENTS IS IN THE NATURE OF TECHNICAL SERVICES , LIABLE FOR DEDUCTION U/S.194J OF THE ACT. AS PER THE SAID CONTRACT, THE SERVICE PROVIDER IS REQUIR ED TO CARRY OUT THE ONGOING MAINTENANCE AND INSPECTION OF ALL THE EQUIPMENT, SPECIAL INSPECTION OF THE EQUIPMENT SAFETY AND FUNCTIONAL @ INSPECTION OF THE EQUIPMENT. SIMILARLY, HE IS ALSO REQUIRED TO KEEP THE RECORD OF ALL THE PREVENTIVE MAINTENANCE AND PE RIODIC INSPECTIONS AND REPORT THE PROGRESS TO THE ASSESSEE THROUGH THE AGREED FORM AT. THESE SERVICES ARE OF THE ROUTINE NATURE AND HENCE IT CANNOT BE SAID THAT THE TECHNICAL SERVICES ARE PROVIDED REQUIRING THE DEDUCTION OF TAX U/ S. 194J OF THE ACT. IT IS U NDISPUTED FACT THAT THE SERVICES ONLY OF THE TECHNICAL NATURE ARE COVERED U/S. 194J OF THE ACT. IN THE PRESENT CASE, THE MAINTENANCE CONTRACTS ENTERED BY THE ASSESSEE WITH THE SERVICE PROVIDERS LIKE SIEMENS, ETC. ARE OF THE ROUTINE NATURE IN ORDER TO ENSUR E THE SMOOTH FUNCTIONING OF THE EQUIPMENTS. THE PURPOSE OF THE SAID MAINTENANCE IS ONLY TO ENSURE THE LONGER LIFE OF THE EQUIPMENT. SUCH MAINTENANCE CANNOT BE CONSIDERED TO BE OF TECHNIC AL NATURE. 17. THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY DE LHI TRIBUNAL IN THE CASE OF DCIT V. PARASRAMPURIA SYNTHETICS LTD. [20 SOT 248] WHEREIN THE TRIBUNAL, WHILE DEALING WITH THE ISSUE RELATING TO APPLICABILITY OF S. 194J OF THE ACT IN RESPECT OF THE PAYMENT TOWARDS AMC CONTRACT, OBSERVED AS UNDER: 'IN THE PR ESENT CASE, IT IS SEEN THAT THERE MAY BE USE OF SERVICES OF TECHNICALLY QUALIFIED PERSONS TO RENDER THE SERVICES BUT THAT ITSELF DO ITA NO S . 387&646 / 14 11 NOT BRING THE AMOUNT PAID AS 'FEES FOR TECHNICAL SERVICES WITHIN THE MEANING OF EXPLANATION 2 TO SECTION 9(L)(VIL). THE AMOU NTS PAID ARE TOWARDS ANNUAL MAINTENANCE CONTRACT OF CERTAIN MACHINERY OR FOR CONVERTING POY INTO TEXTURED/TWISTED YARN. THE TECHNOLOGY OR THE TECHNICAL KNOWLEDGE OF THE PERSONS IS NOT MADE AVAILABLE TO THE ASSESSEE BUT ONLY BY USING SUCH TECHNICAL KNOWLEDG E SERVICES ARE RENDERED TO THE ASSESSEE. IN SUCH A CASE, IT CANNOT BE SAID THAT THE AMOUNT IS PAID AS 'FEES FOR TECHNICAL SERVICES'. RENDERING SERVICES BY USING TECHNICAL KNOWLEDGE OR SKILL IS DIFFERENT THAN CHARGING FEES FOR TECHNICAL SERVICES. IN A LATTE R CASE, THE TECHNICAL SERVICES ARE MADE AVAILABLE DUE TO WHICH THE ASSESSEE ACQUIRED CERTAIN RIGHT WHICH CAN BE FURTHER USED. IN THE PRESENT CASE, IT IS NOT SO. THE PERSONS RENDERING CERTAIN SERVICES HAS ONLY MAINTAINED MACHINERY OR CONVERTED YARN BUT THAT KNOWLEDGE IS NOT NOW VESTED WITH THE ASSESSEE BY WHICH ITSELF IT CAN DO RESEARCH WORK. IN THE CIRCUMSTANCES, THE AMOUNT PAID CANNOT BE CONSIDERED AS FEES FOR TECHNICAL SERVICES WITHIN THE MEANING OF SECTION 194 J OF THE ACT. ' 18. IN THE CASE OF KANDLA P ORT TRUST VS. DCIT, 50 SOT 109, THE RAJKOT BENCH HELD AS UNDER : - 14 . WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PARTIES, RECORD PERUSED AND GONE HAVE THROUGH THE DECISIONS CITED. THE ISSUE UNDER CONSIDERATION IS WHETHER ANNUAL MAINTENANCE CONTACT, PILO TAGE CONTRACT AND VEHICLE HIRE CONTRACTS COVER UNDER SECTION 194C OR U/S 194J AND 194 - I OF THE ACT. THE ASSESSEE DEDUCTED TAX AT SOURCE UNDER SECTION 194C. THE REVENUE IS OF THE VIEW THAT ANNUAL MAINTENANCE CONTRACT AND PILOTAGE CONTRACT ARE IN THE NATURE OF TECHNICAL SERVICES, THEREFORE, FALLS UNDER SECTION 194J AND VEHICLE CONTRACT IS RENT CONTRACT THEREFORE SECTION 194I IS APPLICABLE. TO EXAMINE THIS ISSUE FIRST OF ALL WE SEE WHAT ARE THE ACTIVITIES OF THE ASSESSEE, AMC & PILOTAGE CONTRACT. THE ASSESSEE IS RUNNING A PORT AND IN ORDER TO CARRY ON THE OPERATIONS MACHINERIES SUCH AS HEAVY CRANES, WEIGH BRIDGE, ELEVATOR, EPBX SYSTEMS ARE INSTALLED. THE ASSESSEE AWARDED SOME CONTRACTS FOR REPAIRS AND MAINTENANCE OF THESE MACHINERIES. SECTION 194C PROVIDES THAT ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY CONTRACTOR FOR CARRYING OUT ANY WORK INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE ITEM OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT ONE PER CENT OF THE PAYMENT AS APPLICABLE OF SUCH SUM AS INCOME - TAX. THE APEX COURT IN TH E CASE OF ASSOCIATED CEMENT CO. LTD. V. CIT [1993 ] 201 ITR 435 / 67 TAXMAN 346 H ELD THAT 'ANY WORK' MEANS ANY WORK AND NOT A 'WORK CONTRACT' WHICH HAS A SPECIAL CONNOTATION IN THE LIP LAW. INDEED, IN THE SUB - SECTION, THE 'WORK' REFERRED TO THEREIN EXPRESSLY INCLUDES SUPPLY & LABOUR TO CARRY OUT A WORK. 'WORK' ENVISAGED IN THE SUBSECTI ON, THEREFORE, HAS A WIDE IMPORT AND COVERS 'ANY WORK' WHICH ONE OR THE OTHER OF THE ITA NO S . 387&646 / 14 12 ORGANIZATIONS SPECIFIED IN THE SUB SECTION CAN GET CARRIED OUT THROUGH A CONTRACTOR UNDER A CONTRACT AND FURTHER INCLUDES OBTAINING BY ANY OF SUCH ORGANIZATIONS. SUPPLY OF LABOUR UNDER CONTRACT WITH A CONTRACTOR FOR CARRYING OUT ITS WORK WHICH WOULD HAVE FALLEN OUTSIDE 'WORK' BUT FOR SPECIFIC INCLUSION IN THE SUB - SECTION. 15 . NOW LET US SEE WHAT IS THE MEANING OF 'FEE FOR TECHNICAL SERVICES'. THE MEANING OF 'FEE FOR TECHNIC AL SERVICES PROVIDED IN EXPLANATION (2) OF SECTION 9(1)(VII) READS AS UNDER: ''EXPLANATION (2) - FOR THE PURPOSES OF THIS CLAUSE, 'FEES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERI AL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOPES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD 'SALARIES'. FROM THE ABOVE DISCUSSION WE FIND THAT FEE FOR TECHNICAL SERVICES INCLUDES PAYMENT OF CONSIDERATION FOR RENDERING OF FOLLOWING SERVICES: ( A ) MANAGERIAL, ( B ) TECHNICAL OR CONSULTANCY SERVICES ( C ) PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL. 16 . 'FEE FOR TECHNICAL SERVICES' DOES NOT INCLUDES FOLLOWING CONSIDERATION - ( I ) CONSTRUCTION ( II ) ASSEMBLY ( III ) MINING OR LIKE PROJECT 17 . A PERUSAL OF ANNUAL MAINTENANCE CONTRACT BETWEEN ASSESSE E AND M/S MCNALLY BHARAT ENGINEERING COMPANY LTD, OTIS ELEVATORS, WE NOTICE THAT THE AM CONTRACTOR SHALL CARRY OUT ALL REPAIRS AS PER DETAILED DESCRIPTION IN THE AGREEMENTS. FROM THESE AGREEMENTS WE DID NOT FIND THAT THESE CONTRACTS WERE IN RESPECT OF MANA GERIAL OR TECHNICAL OR CONSULTANCY SERVICES. THUS, IT IS CLEAR THAT THESE AGREEMENTS WERE RELATED TO ANNUAL MAINTENANCE OF MACHINERIES AND NOT FOR TECHNICAL SERVICES. THE REVENUE IN VIEW OF THE FACT THAT THE CONTRACTORS HAVE UTILIZED SERVICES OF TECHNICAL PERSONS PRESUMED THAT THE ASSESSEE MADE PAYMENTS FOR TECHNICAL SERVICES. FOR THIS PRESUMPTION WE DO NOT AGREE WITH THE REVENUE. IT MAY BE TECHNICAL SERVICES FOR CONTRACTOR BUT NOT FOR THE ASSESSEE. THE CASE OF ASSESSEE IS SIMPLY A CASE OF ANNUAL MAINTENANC E OF MACHINERIES FOR SECTION 194J IS NOT APPLICABLE , WE THEREFORE HOLD ACCORDINGLY. 19. IT IS PERTINENT TO MENTION HERE THAT AFTER HOLDING THE ASSESSEE IN DEFAULT, UNDER VARIOUS PROVISIONS OF SECTION 194, THE AO HAS PASSED ORDER U/S.154, WHEREIN HE HEL D THAT IN VIEW OF THE DECISION OF HON BLE SUPREME ITA NO S . 387&646 / 14 13 COURT IN THE CASE OF HINDUSTAN CO C O - COLA BEVERAGE PVT. LTD. 293 ITR 226 , SINCE THE RECIPIENT OF INCOME HAVE ALREADY PAID THE TAX, THE AO HAS DELETED THE TAX LIABILITY SO IMPOSED, HOWEVER, HE HAS CONFIRMED T HE INTEREST THEREON. THUS, EVEN DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) THE AO HAS PASSED RECTIFICATION ORDER UNDER SECTION 154 AND DELETED ALL THE LIABILITY CREATED UNDER SECTION 201(1) OF THE I.T.ACT. 20 . IN THE RESULT, APP EAL OF THE ASSESSEE IS ALLOWED WHEREAS APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16/09 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 16/09 /201 5 . . /PKM , . / 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//