NATIONAL HEALTH & EDUCATION SOCIETY (P.D HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE ), MUMBAI V. ITO(TDS) 2(4), MUMBAI

ITA 5060/MUM/2013

• Counselvise Citation: 506019914 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVINDER SINDHU
• Assessee Lawyers: S C TIWARI; NATASHA MANGAT
• Keywords: Sale consideration of property below Jantri Value; Question of law; Non-deduction of tax
• Section: 10; 133A; 260A; 194C; 201(1)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - F BENCH. . , !' #$%& , $ '( BEFORE S/SH.D.MANMOHAN, VICE-PRESIDEN T & RAJENDRA,ACCOUNTANT MEMBER /. ITA NOS.5060/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2009-10 NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE)VEER SAVARKAR MARG, MAHIM, MUMBAI-16 PAN: AAATN0093Q VS. ITO (TDS)-2(4), MUMBAI. /. ITA NOS.5061/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2009-10 NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 VS. ITO (TDS)-2(4), MUMBAI. /. ITA NOS.4938/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2009-10 ITO (TDS)-2(4), MUMBAI. VS. NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 /. ITA NOS.4976/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2009-10 ITO (TDS)-2(4), MUMBAI. VS. NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 /. ITA NOS.5062/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2010-11 NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 VS. ITO (TDS)-2(4), MUMBAI. /. ITA NOS.4939/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2010-11 ITO (TDS)-2(4), MUMBAI. VS. NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 /. ITA NOS.5063/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2011-12 NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 VS. ITO (TDS)-2(4), MUMBAI. /. ITA NOS.4940/MUM/2013, ) ) ) ) / ASSESSMENT YEAR-2011-12 ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 2 ITO (TDS)-2(4), MUMBAI. VS. NATIONAL HEALTH & EDUCATION SOCIETY (P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE) VEER SAVARKAR MARG, MAHIM, MUMBAI-16 ( +, / APPELLANT) ( -.+, / RESPONDENT) /0 /0 /0 /0 1 1 1 1 $ $$ $ / ASSESSEE BY : SHRI S.C.TIWARI & MS. NATASHA MANG AT #( 2 1 $ / REVENUE BY : SHRI RAVINDER SINDHU 2 22 2 0 0 0 0 / DATE OF HEARING : 09-01-2015 3) 2 0 / DATE OF PRONOUNCEMENT : 06-02-2015 , 1961 2 22 2 254(1) $ $$ $ %040 %040 %040 %040 '$5 '$5 '$5 '$5 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM $ $ $ $ '( '( '( '( #$%& #$%& #$%& #$%& $ $$ $ : CHALLENGING THE ORDERS OF THE CIT(A)-14,MUMBAI,CROS S-APPEALS HAVE BEEN FILED BY THE ASSESSING OFFICERS(AO.S.)AND THE ASSESSEE FOR THE ABOVE ASSES SMENT YEARS(AY.S.),RAISING VARIOUS GROUNDS OF APPEAL(GOA).ALL THE APPEALS DEAL WITH THE ORDERS PASSED BY THE AO U/S.201(1)OR 201(1A)OF THE ACT.THE MAIN ORDER OF THE CIT(A) RELATES TO AY. 2009-10(ITA/5060/MUM/2013).FIRST,WE WOULD LIKE TO REPRODUCE ALL THE GSOA FILED BY THE A SSESSEE AND THE AO. ITA/5060/MUM/2013,AY.2009-10: 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN OBSERVING THAT MOST OF TH E HOSPITAL-BASED CONSULTANTS ARE EMPLOYEES AND DIRECTING THE ASSESSING OFFICER NOT TO TREAT TH E APPELLANT TO BE IN DEFAULT ONLY IN CASES WHERE THERE IS NO CLAUSE REGARDING MONITORING OF THE PERF ORMANCE AND ASSESSMENT ON A CONTINUOUS BASIS. 2.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN HOLDING THAT THE APPELLAN T SHALL BE ASSESSEE IN DEFAULT EVEN IN SUCH CASES WHERE THERE IS ALLEGED SHORT DEDUCTION OF TAX ON ACCOUNT OF THE PROVISION OF DEDUCTION OF TAX OTHER THAN THE PROVISION BONA FIDE APPLIED BY THE A PPELLANT. 3.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN NOT APPRECIATING THAT THE APPELLANT COULD NOT BE CONSIDERED AN ASSESSEE IN DEFAULT IN THE ABSENCE OF ANY TAX IN DE FAULT AND THE ASSESSING OFFICER NOT BEING IN THE POSITION TO ADJUST THE TAX COLLECTED U/S 201(1) AGA INST ANY OUTSTANDING TAX DEMAND. 4.THAT THE ORDER OF LEARNED CIT( APPEALS) BEING CON TRARY TO THE FACTS OF THE CASE, EVIDENCE AND MATERIAL ON RECORD AND LAW APPLICABLE THERETO SHOUL D BE SET ASIDE, AMENDED OR MODIFIED IN ACCORDANCE WITH THE GROUNDS OF APPEAL DEDUCED ABOVE . 5.EACH OF THE GROUNDS OF APPEAL ENUMERATED ABOVE IS INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER. 6.THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO ITS ELF THE RIGHT TO ADD TO, ALTER OR AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DOCUMENTS AND PAPERS IN SUPPORT OF ITS CL AIM AS MAY BE NECESSARY. ITA/5061/MUM/2013,AY.2009-10: 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN DIRECTING THE ASSESSING O FFICER TO FOLLOW HIS DIRECTIONS IN RESPECT OF HIS APPELLATE ORDER IN QUANTUM PROCEEDINGS U/S 201(1) O F THE ACT. 2.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN HOLDING THAT THE CHARGING OF INTEREST IS CONSEQUENTIAL IN NATURE. ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 3 3.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN NOT APPRECIATING THAT THE APPELLANT COULD NOT BE CONSIDERED AR. ASSESSEE IN DEFAULT IN THE ABSENCE OF ANY TAX IN DE FAULT. 4.THAT THE ORDER OF LEARNED CIT(APPEALS) BEING CONT RARY TO THE FACTS OF THE CASE, EVIDENCE AND MATERIAL ON RECORD AND LAW APPLICABLE THERETO SHOUL D BE SET ASIDE, AMENDED OR MODIFIED IN ACCORDANCE WITH THE GROUNDS OF APPEAL DEDUCED ABOVE . 5.EACH OF THE GROUNDS OF APPEAL ENUMERATED ABOVE IS INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER. 6.THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO ITS ELF THE RIGHT TO ADD TO, ALTER OR AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DOCUMENTS AND PAPERS IN SUPPORT OF ITS CL AIM AS MAY BE NECESSARY. ITA/4938/MUM/2013-AY.2009-10: A)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN NOT CONSIDERING THE TRUE FACTS UNEARTHED DURING SURVEY PROCEEDINGS U/S.133A DATED 04.10.2010 WITH RESPECT TO NOT TO TREAT THE HOSPITAL BASED CONSULTA NT DR.PHULRENU H. CHAUHAN AND OTHERS ON VERIFICATION OF THEIR APPOINTMENT LETTERS AS EMPLOY EES OF THE HOSPITAL AND REMUNERATION PAID TO HIM AND OTHERS IS NOT IN THE NATURE OF SALARY AND P ROVISIONS OF SECTION 192 OF THE I.T.ACT ARE NOT APPLICABLE IN THOSE CASES AND ALSO THE DIRECTION OF THE LD.CIT(A) APPEAL,TO THE ASSESSEE TO FURNISH COPIES OF APPOINTMENT LETTERS IN THE CASE OF SAID P ERSON AND OTHERS FOR VERIFICATION BEFORE THE A.O.,IS UNJUSTIFIED AS THE SAME HAD ALREADY BEEN AS CERTAINED DURING SURVEY PROCEEDINGS AND DURING THE PROCEEDINGS U/S 201 (1) OF THE I.T. ACT, 1961; FROM APPOINTMENT LETTERS FILED BY THE ASSESSEE,IT CAN BE EASILY DEDUCED THAT THE REMUNERA TION PAID TO THE SAID PERSONS IS SALARY AND THE SAME ATTRACTS PROVISIONS OF SECTION 192 AS AGAINST THE SECTION 194J OF THE ACT ADOPTED BY THE ASSESSEE. B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAD ERRED N DELETING THE TOTAL TAX DEMAND OF RS.8,30,664/- RAIS ED ON ACCOUNT OF PAYMENT MADE TO HINDUJA FOUNDATION AND OTHERS WHEREIN THE AO HAD APPLIED TH E PROVISIONS OF 194J INSTEAD OF 194C AS HAD BEEN INFRUCTUOUSLY APPLIED BY THE ASSESSEE WITH OUT APPRECIATING THE FACT THAT THE ASSESSEE HIMSELF ACCEPTED THE FLAW POINTED OUT BY THE SURVEY TEAM AND STARTED APPLYING THE PROVISIONS CT SECTION 194J. C)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN DELETING THE DEMAND RAISED ON ACCOUNT OF PAYMENT MA DE TO HINDUJA TMT/HINDUJA GLOBAL SOLUTION LIMITED AND DRUG HANDLING CHARGES TOTALING TO RS. 1,07,70,503/-(RS.1,03,97,635/- +RS.3,72,868/-) WHICH AMOUNT BEING NON-DEDUCTION OF TAX ON PAYMENT MADE, WITHOUT APPRECIATING THAT, THE FACT OF THE CASE CAME TO LI GHT DURING SURVEY PROCEEDINGS ON 04.10.2010 SINCE TAKING IN :ACCOUNT THE SAME, AN ORDER U/S. 20 1 (1) IS PASSED AND TDS DEFAULT WAS WORKED OUT AND DETERMINED IN TERMS OF ORDER DATED 23.04.20 11. D)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN HOLDING THAT THE ASSESSEES CONTENTIONS AS CORRECT I N RESPECT OF DRUG HANDLING CHARGES APPLYING THE PROVISIONS OF SECTION 194C INSTEAD OF SECTION 1 94H AS CONCLUDED BY THE AO IN COURSE OF PROCEEDINGS U/S. 201(1)/201(1A) OF THE INCOME-TAX A CT, 1961 CHARGES WITHOUT APPRECIATING THAT THE FACT OF THE CASE CAME TO LIGHT DURING SURVEY PR OCEEDINGS ON 04.10.2010 SINCE TAKING INTO ACCOUNT THE SAME, AN ORDER U/S. 201 (1) IS PASSED A ND TDS DEFAULT WAS WORKED OUT AND DETERMINED IN TERMS OF ORDER DATED 23.04.2011. 2.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE OR THEREAFTER. 3.THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND THE SAME BE SET ASIDE AND THE A.O'S ORDER BE RESTORED. ITA/4976/MUM/2013,AY.-2009-10 1.'THE LD.CIT(A) ERRED IN QUASHING THE ORDER U/S 20 1(1A) WHEREBY INTEREST WAS CHARGED ON THE SHORT DEDUCTION DETERMINED U/S 201(1), BY OBSERVING THAT THE ORDER U/S 201(1) HAD BEEN ANNULLED ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 4 AND ALSO ERRED IN NOT APPRECIATING THE FACTS THAT T HE ORDER OF THE LD. CIT(A) (ANNULLING THE SHORT DEDUCTION U/S 201(1) HAD NOT BEEN ACCEPTED BY THE D EPARTMENT AND APPEAL TO ITAT HAD BEEN FILED'. 2.'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE OR THEREAFTER' 3. 'THE ORDER OF THE LD. CIT(A) BEING ERRONEOUS BE SET ASIDE AND THE A.O.'S ORDER BE RESTORED'. ITA/5062 & 5063/MUM/2013,AY.S.2010-11&2011-12: 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN OBSERVING THAT MOST OF TH E HOSPITAL-BASED CONSULTANTS ARE EMPLOYEES AND DIRECTING THE ASSESSING OFFICER NOT TO TREAT TH E APPELLANT TO BE IN DEFAULT ONLY IN CASES WHERE THERE IS NO CLAUSE REGARDING MONITORING OF THE PERF ORMANCE AND ASSESSMENT ON A CONTINUOUS BASIS. 2.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN HOLDING THAT THE APPELLAN T SHALL BE ASSESSEE IN DEFAULT EVEN IN SUCH CASES WHERE THERE IS ALLEGED SHORT DEDUCTION OF TAX ON ACCOUNT OF THE PROVISION OF DEDUCTION OF TAX OTHER THAN THE PROVISION BONA FIDE APPLIED BY THE A PPELLANT. 3.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN NOT APPRECIATING THAT THE APPELLANT COULD NOT BE CONSIDERED AN ASSESSEE IN DEFAULT IN THE ABSENCE OF ANY TAX IN DE FAULT AND THE ASSESSING OFFICER NOT BEING IN THE POSITION TO ADJUST THE TAX COLLECTED U/S 201(1) AGA INST ANY OUTSTANDING TAX DEMAND. 4.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND IN LAW LEARNED CIT(APPEALS) HAD ERRED IN HOLDING THAT THE CHARGING OF INTEREST U/S 201(1A) IS CONSEQUENTIAL IN NATURE. 5.THAT THE ORDER OF LEARNED CIT( APPEALS) BEING CON TRARY TO THE FACTS OF THE CASE, EVIDENCE AND MATERIAL ON RECORD AND LAW APPLICABLE THERETO SHOUL D BE SET ASIDE, AMENDED OR MODIFIED IN ACCORDANCE WITH THE GROUNDS OF APPEAL DEDUCED ABOVE . 6.EACH OF THE GROUNDS OF APPEAL ENUMERATED ABOVE IS INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER. 7.THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO ITS ELF THE RIGHT TO ADD TO, ALTER OR AMEND ANY OF THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING AND TO PRODUCE SUCH FURTHER EVIDENCE, DOCUMENTS AND PAPERS IN SUPPORT OF ITS CL AIM AS MAY BE NECESSARY. ITA/4939&4940/MUM/2013,AY.S.2010-11,2011-12: A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAD ERRED IN NOT CONSIDERING THE TRUE FACTS UNEARTHED DURING SURVEY PROCEEDINGS U/S 133A DATED 04.10.2010 WITH RESPECT TO NOT TO TREAT THE HOSPITAL BASED CONSULTA NT DR. PHULRENU H. CHAUHAN AND OTHERS ON VERIFICATION OF THEIR APPOINTMENT LETTERS AS EMPLOY EES OF THE HOSPITAL AND REMUNERATION PAID TO HIM AND OTHERS IS NOT IN THE NATURE OF SALARY AND P ROVISIONS OF SECTION 192 OF THE I. T. ACT ARE NOT APPLICABLE IN THOSE CASES AND ALSO THE DIRECTION OF THE LD. CIT(A) APPEAL, TO THE ASSESSEE, TO FURNISH COPIES OF APPOINTMENT LETTERS IN THE CASE O F SAID PERSON AND OTHERS FOR VERIFICATION BEFORE THE A.O., IS UNJUSTIFIED AS THE SAME HAD ALREADY BE EN ASCERTAINED DURING SURVEY PROCEEDINGS AND DURING THE PROCEEDINGS U/S 201(1) OF THE I.T. ACT, 1961; FROM APPOINTMENT LETTERS FILED BY THE ASSESSEE, IT CAN BE EASILY DEDUCED THAT THE REMUNER ATION PAID TO THE SAID PERSONS IS SALARY AND THE SAME ATTRACTS PROVISIONS OF SECTION 192 AS AGAINST THE SECTION 194J OF THE AC: ADOPTED BY THE ASSESSEE. B)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN DELETING THE TOTAL TAX DEMAND OF RS.14,31,276/- RAI SED ON ACCOUNT OF PAYMENT MADE TO HINDUJA FOUNDATION AND OTHERS WHEREIN THE AO HAD APPLIED TH E PROVISIONS OF 194J INSTEAD OF 194C AS HAD BEEN INFRUCTUOUSLY APPLIED BY THE ASSESSEE WITH OUT APPRECIATING THE FACT THAT THE ASSESSEE HIMSELF ACCEPTED THE FLAW POINTED OUT BY THE SURVEY TEAM AND STARTED APPLYING THE PROVISIONS OF SECTION 194J. C)ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 5 DELETING THE DEMAND RAISED ON ACCOUNT OF PAYMENT MA DE TO HINDUJA TMT/HINDUJA GLOBAL SOLUTION LIMITED AND DRUG HANDLING CHARGES TOTALING TO RS 11,22,022/- (RS. 8,48,403/- + RS. 2,73,619/-) WHICH AMOUNT BEING NON-DEDUCTION OF TAX ON PAYMENT MADE, WITHOUT APPRECIATING THAT, THE FACT OF THE CASE CAME TO LIGHT DURING SUR VEY PROCEEDINGS ON 04.10.2010 SINCE TAKING INTO ACCOUNT THE SAME, AN ORDER U/S. 201(1) IS PASSED AN D TDS DEFAULT WAS WORKED OUT AND DETERMINED IN TERMS OF ORDER DATED 23.04.2011. D) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAD ERRED IN HOLDING THAT THE ASSESSEES CONTENTIONS AS CORRECT I N RESPECT OF DRUG HANDLING CHARGES BY APPLYING THE PROVISIONS OF SECTION 194C INSTEAD OF SECTION 194H AS CONCLUDED BY THE AO IN COURSE OF PROCEEDINGS U/S. 201(1)/201(1A)THE INCOME -TAX ACT, 1961 CHARGES WITHOUT APPRECIATING THAT THE FACT OF THE CASE CAME TO LIGHT DURING SURV EY PROCEEDINGS ON 04.10.2010 SINCE TAKING INTO ACCOUNT THE SAME, AN ORDER U/S.201(1) IS PASSED AND TDS DEFAULT WAS WORKED OUT AND DETERMINED IN TERMS OF ORDER DATED 23.04.2011. E) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE INTEREST CHARGED U/S. 201(1A), ON THE SHORT DED UCTION OF TDS BY THE ASSESSEE, DETERMINED U/S. 201(1)BY OBSERVING THAT IT WAS CONSEQUENTIAL IN NA TURE, WHICH DECISION OF THE LD. CIT(A) HAD NOT BEEN ACCEPTED BY THE DEPARTMENT ON THE GROUNDS (A) TO (D) ABOVE AND THE SAME HAD BEEN TAKEN UP APPEAL BEFORE ITAT. 2.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY AT THE TIME OF THE HEARING OF THE CASE OR THEREAFTER. 3.THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND THE SAME BE SET ASIDE AND THE A.OS ORDER BE RESTORED. (GROUNDS FOR THE AY.S.2010-11 AND 2011-12 ARE COMMO N-EXCEPT FOR THE AMOUNTS INVOLVED IN GROUNDS NO. B, C & D.) ITA/5060/MUM/2013,AY.2009-10: 2. BEFORE PROCEEDING FURTHER,WE WOULD LIKE TO MENTION THE FACTS OF THE CASE IN BRIEF.THE ASSESSEE,A RENOWNED HOSPITAL OF MUMBAI,IS ENGAGED IN THE ACTIV ITY OF PROVIDING HEALTHCARE SERVICES AND DOING MEDICAL RESEARCH.IT IS MANAGED BY NATIONAL HE ALTH & EDUCATION SOCIETY POPULARLY KNOWN AS P.D.HINDUJA HOSPITAL & MEDICAL RESEARCH CENTRE(H H).A SURVEY OPERATION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE HOSPITAL PRE MISES OF THE ASSESSEE ON 04/10/ 2010 FOR VERIFICATION OF THE COMPLIANCE OF THE PROVISIONS OF TAX DEDUCTION AT SOURCE (TDS). DURING THE COURSE OF SURVEY,STATEMENT OF DEEPAK SAMANT,DIRECTO R(FINANCE)WAS ALSO RECORDED.AS A RESULT, PROCEEDINGS UNDER SECTION 201(1)/201(1A)OF THE ACT WERE INITIATED AND THE ASSESSEE WAS REQUIRED TO SHOW CAUSE AS TO WHY IT SHOULD NOT BE TREATED TO BE AN ASSESSEE-IN-DEFAULT(A-I-D)IN RESPECT OF CERTAIN PAYMENTS.THE ASSESSEE FURNISHED ITS REPLY A ND VARIOUS DETAILS AS REQUIRED BY THE AO. AFTER CONSIDERING THE SAME,THE AO HAD PASSED THE OR DERS U/S.201(1) IN RESPECT OF VARIOUS AY.S., INCLUDING THE AY.UNDER APPEAL.AS PER THE AO,DURING THE COURSE OF SURVEY,VARIOUS ISSUES/DEFAULTS WERE NOTICED WHILE EXAMINING THE BOOKS OF ACCOUNT A ND VERIFICATION OF THE NATURE OF EXPENSES OF THE ASSESSEE.REFERRING TO THE PROVISIONS OF THE SEC TION 201(1)OF THE ACT,HE HELD THAT IF THE TAX WAS NOT DEDUCTED AS PER THE PROVISIONS OF THE ACT THERE WAS A DEFAULT,THAT DEDUCTING THE TAX APPLYING WRONG SECTION OR APPLYING A RATE DIFFERENT THAN THE RATE PRESCRIBED BY THE ACT TANTAMOUNTED TO DEFAULT,THAT THE ASSESSEE HAD SHORT DEDUCTED THE TA X BY APPLYING WRONG SECTION,THAT TO THAT EXTENT THE ASSESSEE WAS LIABLE TO BE TREATED AS A-I-D WITH IN THE MEANING OF SECTION 201(1)/(1A)OF THE ACT. 3. FIRST GROUND OF APPEAL IS ABOUT TAX TO BE DEDUCTED AT SOU RCE ON REMUNERATION TO HOSPITAL BASED CONSULTANTS(HBCS).DURING THE SURVEY PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAD THREE CATEGORIES OF DOCTORS I.E.HBCS.VISITING CONSULTANTS (VCS)AND JUNIOR DOCTORS(JDS),THAT THE ASSESSEE WAS DEDUCTION TAX U/S.192 OF THE ACT WITH REGARD TO JDS.,THAT IT WAS DEDUCTING TAX AS ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 6 PER THE PROVISIONS OF SEC.194J OF THE ACT IN RESPEC T OF HBCS AND VCS,THAT DURING THE YEAR UNDER APPEAL THE ASSESSEE HAD MADE PAYMENT OF RS.58,02,29 ,487/-TO THE HBCS.THE AO HELD THAT THE TERMS OF APPOINTMENT OF HBCS CLEARLY INDICATED THAT THE ASSESSEE EXERCISED A GREAT DEAL OF CONTROL OVER THEM,THAT IT SUBJECTED THEM TO VARIOUS RESTRICTIVE CLAUSES,THAT THE ASSESSEE PRESCRIBED FIXED WORKING HOURS AND HAD PLACED ACCOUNTABILITY,T HAT THERE WAS EMPLOYEE-EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND THE HBCS.HE T OOK NOTE OF THE CLAUSES CONTAINED IN ONE OF THE LETTERS ISSUED BY THE ASSESSEE,WHEREIN TERMS OF APPOINTMENT OF THE HBCS WERE MENTIONED. HE FOUND THAT ALMOST ALL OTHER LETTERS WERE ISSUE O N SIMILAR LINES.AS PER THE AO, FOLLOWING FEATURES OF THE LETTER OF APPOINTMENT WERE CRUCIAL FOR DETERMINING THE ISSUE OF EMPLOYER- EMPLOYEE RELATIONSHIP: A.THE APPOINTMENT LETTERS WERE ISSUED TO THE CONSUL TANT DOCTORS WITH REFERENCE TO THEIR APPLICATIONS B.APPOINTMENT WAS OFFERED TO THEM BY HOSPITAL MANAG EMENT. C.APPOINTMENT OFFERED TO THEM WAS FOR A FIXED PERIO D AND THEIR WORKING HOURS/TIMINGS ARE FIXED IN ADVANCE. D.THE MANAGEMENT RESERVEED THE RIGHT TO MODIFY/ CHA NGE/ DISCONTINUE ANY/ ALL THE TERMS AND CONDITIONS MENTIONED IN THE APPOINTMENT LETTER, WIT HOUT NOTICE AND WITHOUT ASSIGNING ANY REASONS. E.THE CONSULTANTS HAD BEEN MADE RESPONSIBLE FOR APP ROPRIATE ADMINISTRATIVE RESPONSIBILITY ASSIGNED TO THEM BY HOSPITAL MANAGEMENT. F.THE CONSULTANTS WERE REQUIRED TO WORK AT THE HOSP ITAL PREMISES. G.CONSULTANTS WERE GENERALLY UTILIZING THE DIAGNOST IC/ TESTING/ SURGICAL /MEDICAL EQUIPMENT FACILITY AND CONSUMABLES PROVIDED BY THE HOSPITAL. H.THE COMPENSATION PAID TO THE CONSULTANTS WAS INDE PENDENT OF THE HOSPITA1'S INCOME/LOSS. I.APPOINTMENT LETTER ENFORCED ACTIVE INVOLVEMENT OF THE HOSPITAL BASED CONSULTANTS IN ALL MEDICAL PROGRAMMES ARRANGED IN THE HOSPITAL AND THEIR ADHER ENCE TO ALL RULES AND REGULATIONS OF THE HOSPITAL. J.THE APPOINTMENT INITIALLY GIVEN FOR A FIXED PERIO D COULD BE EXTENDED ON MUTUAL CONSENT. K.THE CONSULTANT DOCTORS WERE REQUIRED TO MAKE ANY REFERRAL FOR CLINICAL/ DIAGNOSTIC TESTS WITHIN THE HOSPITAL ITSELF. REFERENCE TO ANY OUTSIDE HOSPI TALS/NURSING HOMES/DOCTORS/DIAGNOSTIC CENTRES WILL BE TREATED AS VIOLATION OF TERMS OF ENGAGEMENT . 1THEIR APPOINTMENTS WERE GOVERNED BY THE EXISTING S ERVICE REGULATIONS OF THE HOSPITAL AND ALL THOSE CHANGES AND AMENDMENTS THAT MAY BE INTRODUCED BY THE MANAGEMENT FROM TIME TO TIME. M.DURING THE PERIOD OF APPOINTMENT, NINETY DAY'S NO TICE IS REQUIRED TO BE GIVEN FOR TERMINATION OF SERVICE FROM EITHER SIDE. ON THE BASIS OF THE TERMS OF APPOINTMENT OF HBCS,HE HELD THAT THE HBCS WERE EMPLOYEES OF THE ASSESSEE AND THEY FELL IN THE CATEGORY OF FIXED PER IOD/CONTRACT EMPLOYEE/PART TIME EMPLOYEE.HE RELIED UPON THE CASE OF ST.STEPHENS HOSPITAL(6SOT60 )OF DELHI TRIBUNAL AND FURTHER HELD THAT THERE WAS NO CONTRACT FOR SERVICE BUT THERE WAS CON TRACT OF SERVICE,THAT TAX WAS TO BE DEDUCTED AS PER SECTION 192 OF THE ACT AND NOT U/S.194 J OF THE ACT,THAT THE APPOINTMENT LETTERS ISSUE BY THE ASSESSEE CARRIED SUFFICIENT SUGGESTED THE MANNER IN WHICH THE HBCS SHOULD CARRY OUT WORK ASSIGNED TO THEM,THAT THE ASSESSEE WAS EXERCISING S UFFICIENT CONTROL OVER THE CONSULTANT,THAT THERE WAS EMPLOYEE-EMPLOYER RELATION BETWEEN THEM,THAT PA YMENT MADE BY THE ASSESSEE TO THE HBCS WAS SALARY.FOR NON-DEDUCTION OF TAX U/S.192 OF THE ACT FOR THE SAID PAYMENTS THE AO TREATED THE ASSESSEE AN A-I-D WITHIN THE MEANING OF SECTION 201 (1)OF THE ACT.THE AO FOUND THAT THE ASSESSEE HAD DEDUCTED TAX @5.25% U/S.194 J FOR THE PAYMENTS MADE TO HBCS.HE HELD THAT TAX WAS TO BE DEDUCTED @33% (AS PER THE PROVISIONS OF S ECTION 192 OF THE ACT)FOR THE PAYMENT, AMOUNTING TO RS.50.23 CRORES,MADE TO HBCS DURING TH E YEAR UNDER CONSIDERATION.HE CALCULATED ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 7 THE SHORTFALL AT RS.11,69,47,351/-(16.57 CROES -4.8 8 CRORES).AS PER THE AO THE ASSESSEE HAD PROVIDED A FEW CONFIRMATORY LETTERS,IN THE FORM OF SELF DECLARATIONS WITHOUT ANY SUPPORTING DOCUMENTS AND OR EVIDENCE,FROM 63 HBCS,VIDE ITS SUB MISSION DATED 26.04.2011.HE FURTHER MENTIONED THAT THE COPIES OF RETURN OF INCOME OR DA TES OF PAYMENT OF TAXES BY WAY OF ADVANCE TAX/SAT OR OTHERWISE WERE NOT PROVIDED.HE HELD THAT IN THE ABSENCE OF PROPER DOCUMENTS FILING OF SELF AVERRING-CONFIRMATIONS HAD NO EVIDENTIARY V ALUE,THAT THE CONFIRMATORY LETTERS WERE VERY VAGUE AND OBSCURE,THAT IT WAS NOT EXPLAINED BY THE ASSESSEE AS HOW THE INCOME UNDER QUESTION HAD BEEN ACCOUNTED FOR BY THE HBCS,THAT IT WAS NOT BROUGHT ON RECORD AS TO HOW AND WHEN THE TAX LIABILITY ON THE RECEIPT IN QUESTION HAD BEEN D ISCHARGED BY THE HBCS.,THAT CONFIRMATORY LETTERS HAD BEEN FURNISHED FROM 63 DOCTORS ONLY,THAT 7 CONS ULTANTS DID NOT FIGURE IN THE LIST OF 129 CONSULTANTS PROVIDED AT THE TIME OF PROCEEDING U/S. 201(1) OF THE ACT,THAT THE NUMBER OF CONFIRMATIONS FOR THE YEAR UNDER CONSIDERATION FOR FY.2007-08 STOOD REDUCED TO 56 AS AGAINST A LIST OF 129 HBCS TO WHOM PAYMENTS WERE MADE,THAT CO NFIRMATORY LETTERS PLACED ON RECORD WERE GENERIC AND VAGUE,THAT SOME OF THE CONFIRMATORY LET TERS DID NOT CONTAIN EVEN PAN OF THE PAYEE.FINALLY,HE HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS, THAT THE PROCEEDING U/S. 201(1A) OF THE ACT COULD NOT BE POSTPONED FOR AN IN DEFINITE PERIOD FOR WANT OF DETAILS.HE WORKED OUT INTEREST-DEMAND,U/S.201(1A)OF THE ACT,AT RS.3.8 9 CRORES FOR THE YEAR UNDER CONSIDERATION. 4. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED BEFORE THE FIRST APPELLATE AUTHORITY (FAA).WITH REGARD TO FINDING OF THE AO THAT THERE W AS EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND THE HBCS,THE ASSESSEE ARGUED BEFOR E THE FAA THAT THE HBCS WOULD SHARE CONSULTANCY FEES WITH THE HOSPITAL,THAT THERE WAS N OTHING IN THE ALLEGED APPOINTMENT LETTERS THAT WOULD PROVE THAT THERE WAS EMPLOYER EMPLOYEE RELATI ONSHIP BETWEEN THE TWO,THAT HBCS WERE NOT TOLD HOW TO PERFORM THEIR DUTIES,THAT THERE WAS ABS ENCE OF CONTROL OR DIRECTION,THAT GUIDELINES WERE THERE FOR MAINTAINING HOSPITAL DISCIPLINE,THAT RELATION BETWEEN HH AND HBCS WAS OF HOSPITAL AND CONSULTING DOCTOR, THAT TAX WAS RIGHTL Y DEDUCTED U/S.194 J OF THE ACT,THAT DOCTORS GETTING FEES FROM THE HOSPITAL WOULD SHOW THE SAID AMOUNTS IN THEIR RETURNS OF INCOME AND WOULD PAY TAXES ACCORDINGLY,THAT THE MAIN CONDITION OF FE ES SHARING WAS IGNORED BY THE AO,THAT THE HBCS WERE ALLOWED TO CONTINUE WITH THE OUTSIDE ATTA CHMENT,THAT THE ASSESSEE HAD FORMULATED SENIOR MEDICAL STAFF,RULES AND REGULATIONS DATED 17 .10.1989,THAT THE TERMS AND CONDITIONS OF THE APPOINTMENT LETTERS WERE IN THE NATURE OF DISCI PLINE RATHER THAN TO CURB THE FREEDOM OF THE DOCTORS. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER PASSED BY THE AO U/S. 201 (1) OF THE ACT,THE FAA HELD THAT HE HAD LOOKED IN TO THE APPOINTMENT LETTERS FURNISHED BY THE ASSESSEE IN RESPECT OF 6 DOCTORS AS WELL AS THAT OF DR NITIN SHAH,WHOSE APPOINTMENT LETTER WAS EXAMINED BY THE AO,THAT MOST OF THE HBCS WERE THOSE WHO WERE ENGAGED EXCLUSIVELY BY THE ASSESSEE ONLY,THAT THOSE WHO WERE NOT EXCLUSIVELY E NGAGED BY THE ASSESSEE WERE ALLOWED TO WORK ELSEWHERE ONLY WITH CERTAIN TERMS AND CONDITIONS,TH AT IT COULD BE REASONABLY CONCLUDED THAT SUCH HBCS FELL IN THE CATEGORY OF EMPLOYEES OF THE APPEL LANT THOUGH IT COULD ALSO BE SAID THAT THEY WERE IN THE CATEGORY OF FIXED PERIOD /PART-TIME/CON TRACT EMPLOYEES OF THE ASSESSEE,THAT THE RELATIONSHIP BETWEEN THE ASSESSEE AND HBCS WAS PURE LY THAT OF EMPLOYER AND EMPLOYEE AND THE REMUNERATION PAID TO THEM AS A RESULT OF THE SAID R ELATIONSHIP WAS IN THE NATURE OF SALARY WHICH WOULD ATTRACT THE PROVISIONS OF SECTION 192 OF THE ACT, THAT SUPERVISION AND CONTROL OF ONE OVER THE OTHER WAS ONE OF THE MOST IMPORTANT FACTORS WHI CH WOULD DETERMINE THE RELATIONSHIP BETWEEN THE TWO PARTIES,THAT IT WAS EVIDENT FROM THE TERMS OF THE APPOINTMENT OF MOST OF THE HBCS THAT ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 8 THE SUPERVISION AND CONTROL OVER THEM WAS WHOLLY TH AT OF THE ASSESSEE SO FAR AS THEIR WORK IN THE HOSPITAL WAS CONCERNED,THAT IT WAS NOT A CASE WHERE THE CONCERNED HBCS HAD NO SUPERVISION AND CONTROL OVER THEM BY THE ASSESSEE, THAT SUCH SUPERV ISION AND CONTROL MIGHT NOT BE IN RESPECT OF THEIR DAY TO DAY WORK OR IN RESPECT OF THEIR OWN AR EA OF MEDICAL SPECIALISATION,THAT HBCS WERE NOT ONLY EMPLOYED BY THE ASSESSEE BUT WERE ALSO SUB JECTED TO CONTINUOUS MONITORING.HE HELD THAT THE FACTS OF THE CASE OF ST.STEPHEN HOSPITAL (SUPRA ),WERE ALMOST SIMILAR TO THE FACTS OF THE CASE UNDER APPEAL.THE FAA ALSO DISCUSSED OTHER CASES DEA LING WITH EMPLOYER EMPLOYEE RELATIONSHIP. HE FURTHER HELD THAT THE APPOINTMENT LETTERS ISSUED BY THE ASSESSEE TO ITS CONSULTANTS HAD SUFFICIENT RESTRICTIONS ON THE CONSULTANTS,THAT TER MS OF THE APPOINTMENT LETTERS OF THE HBCS MADE IT CLEAR THAT THE ASSESSEE WAS EXERCISING SUFFICIEN T CONTROL OVER THE CONSULTANTS,THAT WORKING PERIOD OF THE CONSULTANTS WAS FIXED,THAT REMUNERATI ON PAID TO THEM WAS EITHER ON A MONTHLY BASIS OR AS A PERCENTAGE OF FEES COLLECTED FROM THE PATIE NTS,THAT HBCS WERE NOT REQUIRED TO UNDERTAKE OR CONCERN THEMSELVES DIRECTLY OR INDIRECTLY WITH A NY OTHER EMPLOYMENT OR ACTIVITY DURING THE PERIOD OF CONTRACT WITH THE ASSESSEE,THAT OTHER EMP LOYMENT WITH OTHERS WAS WITH THE CONSENT OF THE ASSESSEE.ABOUT THE SUBMISSION OF MADE BY THE AS SESSEE PERTAINING TO THE NON ENTITLEMENT OF BENEFIT LIKE PROVIDENT FUND SCHEME,GRATUITY,ESIC,VA RIOUS ALLOWANCES TO THE HBCS, THE AO HELD THAT THOSE FACTORS WERE NOT RELEVANT FOR THE PURPOS E OF EXAMINING AN EMPLOYER-EMPLOYEE RELATION -SHIP.DELIBERATING UPON A FEW EXCEPTIONS,THE FAA HE LD THAT IN THE CASE OF DR. P. H. CHAUHAN (HBC)IT WAS FOUND THAT HE WAS NOT PAID FIXED MONTHL Y REMUNERATION,THAT NO CONDITION WAS IMPOSED UPON HIM FOR PRACTICE ANYWHERE ELSE,THAT TH ERE WAS NO STIPULATION IN THE APPOINTMENT LETTER REGARDING MONITORING HIS PERFORMANCE AND ASS ESSMENT ON A CONTINUOUS BASIS, THAT IT WAS AN EXCEPTIONAL CASE,THAT HE COULD NOT BE TREATED AN EM PLOYEE OF THE ASSESSEE,THAT IN HIS CASE TAX WAS NOT BE DEDUCTED UNDER THE PROVISIONS OF SECTION 192 OF THE ACT.HE FURTHER OBSERVED THAT THE ASSESSEE HAD NOT FURNISHED THE APPOINTMENT LETTERS OF ALL THE DOCTORS WORKING AS HBCS WITH THE IT. SO, HE DIRECTED IT TO FURNISH COPIES OF SUCH APPOIN TMENT LETTERS BEFORE THE AO.HE DIRECTED THE AO TO EXAMINE THE SAME AND DECIDE THE ISSUE IN LIGHT O F HIS DISCUSSION HELD IN THE CASE OF DR.P.H. CHAUNAN.HE FURTHER DIRECTED THE AO TO NOT TO TREAT THE ASSESSEE IN DEFAULT IN SUCH CASES WHERE THERE WAS NO CLAUSE REGARDING MONITORING OF PERFORM ANCE AND ASSESSMENT ON A CONTINUOUS BASIS. 6. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)ARGUED T HAT THE ASSESSEE HAD RIGHTLY DEDUCTED THE TAX FROM PAYMENTS TO HBCS UNDER THE PROVISIONS OF S ECTION 194J,THAT DURING THE COURSE OF SURVEY U/S.133A THE SURVEY OFFICER WENT THROUGH LETTERS OF ENGAGEMENT OF HBCS AND CALLED THEM APPOINTMENT LETTER,THAT SAME WERE NOT APPOINTMENT L ETTERS, THAT THEY WERE LETTERS OF ENGAGEMENT, THAT OUT OF 179 LETTERS OF ENGAGEMENT THE SURVEY OF FICER PICKED UP THE LETTER OF ONE DR. NITIN SHAH (PAPER-BOOK-IL, PAGE NOS.158-59), THAT THE LETTERS OF ENGAGEMENT WERE NOT STEREOTYPE AS THEY WERE THE RESULT OF ONE-TO-ONE NEGOTIATION WITH EACH DOCT OR,THAT THE ANNEXURE TO THOSE LETTERS OF ENGAGE -MENT WAS SAME IN ALL CASES FOR THE REASON THAT THE ANNEXURE DEALT WITH POLICY ISSUES,THAT THEY DID NOT DEAL WITH TERMS OF ENGAGEMENT,THAT THERE WAS NO THING ADVERSE IN THE STATEMENT OF FINANCE DIRECTOR,THAT ENGAGEMENT LETTER ISSUED TO DR. ANJAL I SHETTY (PAPER-BOOK-II, PAGE NOS. 165-66) ON FIXED REMUNERATION BASIS,THAT SUCH CASES WERE FEW A ND FAR BETWEEN,THAT ONLY 3 CASES OUT OF THE 40 CASES OF DOCTORS REJECTED BY FAA WERE ON FIXED REMU NERATION,THAT THE LETTERS OF ENGAGEMENT WERE ON FEE SHARING BASIS,THAT FEE SHARING WAS THE HEART AND CORE OF THE LETTERS OF ENGAGEMENT,THAT SAID ASPECT HAD BEEN SIDETRACKED BY THE AO AND THE FAA,T HAT THERE WERE NO SERVICE RULES FOR HBCS THAT THERE WERE ONLY CONDUCT RULES,THAT THERE WAS NO PAY SCALE, LEAVE RULES, PROVIDENT FUND,THAT THERE WAS VAST DIFFERENCE BETWEEN SERVICE RULES AND CONDUCT RULES,THAT THERE WERE BOTH SERVICE RULES AND CONDUCT RULES FOR JUNIOR DOCTORS,THAT THE LINE OF DEMARCATION BETWEEN AN INDEPENDENT ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 9 CONTRACTOR AND AN EMPLOYEE WAS VERY THIN AND THE TW O CONCEPTS SOMETIMES OVERLAPPED,THAT THERE WAS NO SIMILARITY BETWEEN THE CASE OF A TAILOR BEIN G PAID AT PIECE RATE AND THE CASE OF HBCS SHARING FEE WITH HOSPITAL,THAT HBCS WERE NOT WORKM EN,THAT THE AO AND THE FAA TRIED TO DRESS UP HBCS AS SALARIED EMPLOYEES TAKING SUPPORT FROM A FEW JUDGMENTS DELIVERED IN CASES ARISING UNDER INDUSTRIAL LAW, THAT SOME OF THE FEATURES OF LETTERS OF ENGAGEMENT OF HBCS POINTED OUT IN THE ORDERS OF AO AND FAA DID NOT BRING THE HBCS IN THE FOLD OF SALARIED EMPLOYEES LIABLE TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 192 OF THE ACT, THAT CONTROL AND SUPERVISION WERE ESSENTIAL IN A CIVILISED SOCIETY,THAT IN EVERY CONT RACT OR ARRANGEMENT THERE HAD TO BE SUCH STIPULATIONS AND SUPERVISION,THAT SOME CONTROL AND SUPERVISION DID NOT RESULT INTO EMPLOYER- EMPLOYEE OR MASTER-SERVANT RELATIONSHIP,THAT THE AS SESSEE BEING A REPUTED HOSPITAL COULD NOT ALLOW HBCS TO ACT ENTIRELY IN ACCORDANCE WITH THEIR SWEET WILL,THAT FOR THOSE GENERAL GUIDELINES THE HBCS DID NOT BECOME SALARIED EMPLOYEES OF THE H OSPITAL, THAT THE ORDERS U/S.201(1) MADE BY THE AO ARE WITHOUT JURISDICTION AS HAVING BEEN MADE WITHOUT SATISFYING THE PRECONDITION THAT THERE SHOULD BE TAX IN DEFAULT FOR WHICH THE PERSON RESPONSIBLE TO DEDUCT TAX MAY BE TREATED AS A- I-D,THAT THERE OUGHT TO EXIST AN OUTSTANDING DEMAND PAYABLE BY THE PAYEE THEN AND THEN ALONE THE DEFAULTING TAX-DEDUCTOR CAN BE PROCEEDED U/S 201(1) ,THAT THE AO HAD NOT BROUGHT ON RECORD FOR ALL THESE YEARS ANY INSTANCE OF ANY TAX DEMAND OUTS TANDING AGAINST ANY HBC WHO HAD ALREADY COMPLIED WITH THEIR TAX LIABILITY,THAT THE ORDERS U/S.201(1) MADE BY THE AO WERE LIABLE TO BE QUASHED,THAT THE LIABILITY OF THE PERSON RESPONSIBL E IS DEPENDENT UPON THE DEDUCTEE FAILING OR OTHERWISE TO PAY SUCH TAX DIRECTLY,THAT THE ACTION U/S. 201 (1)DEPENDED ON THE OUTCOME OF THE ASSESSMENT OF THE PAYEE,THAT THE AO HAD NOT COME FO RWARD WITH EVEN A SINGLE INSTANCE WHERE ANY HBC HAD NOT PAID IN FULL THE TAXES DUE FROM HIM OR THERE WAS ANY TAX IN DEFAULT ON THE PART OF ANY HBC IN RELATION TO THE ASSESSMENT YEAR UNDER AP PEAL, THAT AS PER THE PROVISIONS OF SECTION 191 OF THE ACT WHERE THERE WAS NO PROVISION FOR DED UCTION OF TAX AT THE TIME OF PAYMENT OR WHERE INCOME TAX HAD NOT BEEN DEDUCTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT SUCH TAX WOULD BE PAID BY THE PAYEE.HE REFERRED TO THE DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF MAHINDRA & MAHINDRA LTD.(22 TTJ (MUM)(SB) 577)IN TH IS REGARD.IT WAS FURTHER ARGUED THE PROVISIONS OF SECTION 191 READ WITH EXPLANATION MAK E IT VERY CLEAR THAT THE AO MUST FIND WHERE THE DEDUCTEE HAD ALSO FAILED TO PAY THE TAX DIRECTL Y AND THEN ONLY HE SHOULD PROCEED TO INITIATE ACTION U/S. 201(1) OR 201 (1A) AGAINST THE DEDUCTOR ,THAT ALL THE PROCEEDINGS INITIATED BY THE AO ARE PREMATURE AND WITHOUT HAVING FULFILLED THE COND ITIONS PRECEDENT TO INITIATE ACTION U/ S. 201(1) OR 201(1A) AGAINST THE ASSESSEE, THAT IT HAD FURNIS HED TO THE AO PAN DETAILS OF ALL THE HBCS AND IN MOST CASES COPIES OF THEIR RETURNS OF INCOME AS WELL,THAT THE COULD HAVE ASCERTAINED FROM THE DEPARTMENTAL RECORD AS TO WHETHER THERE WAS ANY TAX AT ALL FOR WHICH THE ASSESSEE COULD BE TREATED A-I-D,THAT THE PAYER COULD NOT BE SHOULDERED WITH T HE BURDEN TO COLLECT DATA FROM THE HIS PAYEES ABOUT PAYMENT OF TAX BY THEM.THE AR RELIED UPON THE CASES OF VODAFONE ESSAR LTD. 9 ITR-(TRIB) 182 (MUM) AND ALLAHABAD BANK (ITA NO. 448 TO 454/ A GRA OF 2011).AR CONTENDED THAT IT WAS NOT THE CASE OF THE DEPARTMENT THAT THE ASSESSEE-DE DUCTOR DID NOT DEDUCT OR AFTER DEDUCTION FAILED TO PAY THE TAX IN RELATION TO ITS PAYMENTS TO HBCS, THAT THE ASSESSEE COULD NOT BE TREATED AS A-I-D, THAT UNDER THE PROVISIONS OF SECTION 192 THE LIABIL ITY TO DEDUCT TAX AT THE TIME OF PAYMENT WOULD ARISE IF THERE WAS PAYMENT OF AN INCOME CHARGEABLE UNDER THE HEAD SALARIES,THAT IN THE CASE OF THE ASSESSEE THE PAYMENT COULD NOT BE SAID TO BE PAYMEN T OF ANY INCOME CHARGEABLE UNDER THE HEAD SALARIES,THAT NOT A SINGLE HBC HAD BEEN ASSESSED UN DER THE HEAD SALARIES,THAT QUESTION OF HEAD OF INCOME HAD TO BE DETERMINED IN THE ASSESSMENT OF TH E PERSON TO WHOM THE INCOME CHARGEABLE TO TAX BELONGED,THAT IT COULD NOT BE DETERMINED IN ANY PROCEEDING OF THE PAYER,THAT WHERE TAX HAD BEEN DEDUCTED AND AFTER DEDUCTION SUCH TAX HAD BEEN PAID THERE IS COMPLIANCE TO THE PROVISIONS ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 10 OF SECTION 201,THAT UNLESS IT COULD BE HELD THAT TH E DEDUCTOR DID NOT ACT HONESTLY AND FAIRLY NO FAULT COULD BE FOUND WITH THE DEDUCTOR, THAT IN MOS T CASES HBCS RECEIVED VARIABLE AMOUNTS ON THE BASIS OF SHARING IN AGREED RATIO THE FEES COLLE CTED FROM PATIENTS,THAT THE VARIABLE REMUNERA - TION CONSTITUTED 95.16% IN AY 2008-09, 96% IN AY 20 09-10, 97.03% IN AY 2010-11 AND 95.22% IN AY 2011-12 OF THE TOTAL PAYMENTS RECEIVED BY THOSE HBCS,THAT FEE SHARING WAS THE ESSENCE OF CONTRACT BETWEEN THE ASSESSEE AND HBCS,T HAT IN THE ENGAGEMENT LETTERS THERE WAS NO ASSURED PERIOD OF SERVICE,THAT SAME WERE TERM CONTR ACTS TO BE RENEWED PERIODICALLY AT THE OPTION OF BOTH PARTIES,THAT EACH HBC HAD BEEN REQUIRED TO HAVE INDEMNITY INSURANCE TO COVER MEDICO LEGAL PROBLEMS SIGNIFYING THAT THEY WERE INDEPENDEN T PROFESSIONALS AND NOT EMPLOYEES, THAT THE FAA HAD UPHELD THE ORDER OF AO IN ALL CASES WHEREIN THE LETTERS OF ENGAGEMENT THERE WAS A CLAUSE REGARDING MONITORING OF THE PERFORMANCE AND ASSESSMENT ON A CONTINUOUS BASIS,THAT THERE WAS NO FORMAL SYSTEM OF PERFORMANCE EVALUATION OR R EPORTING OF HBCS IN PLACE,THAT THE WHOLE EXERCISE WAS ENTIRELY INFORMAL,THAT THERE WERE CLAU SES STATING THAT HBC WAS EXPECTED TO FOLLOW THE STANDARDS OF THE HOSPITAL AND MAINTAIN HIGH QUA LITY,THAT THE HOSPITAL COULD NOT LET ANY HBC TO ACT AND OPERATE ENTIRELY HIS SWEET WILL,THAT THE HBCS WERE SUPPOSED TO BE IN THE HOSPITAL AND PERFORMING THEIR ACT IN ACCORDANCE WITH SCHEDULE KN OWN TO THE HOSPITAL AND THE PATIENTS,THAT SUCH STIPULATIONS WERE NOT IN THE NATURE OF EMPLOYE RS DICTATES,THAT THEY WERE ESSENTIAL REQUIREMENTS FOR THE HOSPITALS ARRANGEMENT WITH HBC S TO BECOME EFFECTIVE AND OPERATIONAL,THAT THE BASIC FEATURE PERMEATING THE ARRANGEMENT WITH H BCS WAS SHARING OF FEE COLLECTED FROM PATIENTS BY HOSPITAL AS WELL AS HBCS,THAT IF AN HBC WAS ABSENT ON A PARTICULAR DAY NO LEAVE WAS GRANTED TO HIM,THAT HIS ABSENCE RESULTED INTO NON G ENERATION OF FEES FOR BOTH HOSPITAL AND HBCS, THAT BECAUSE OF FEE SHARING ARRANGEMENT HBCS WOULD NOT RECEIVE ANY FIXED AMOUNT WHICH VARIED AND FLUCTUATED CONSIDERABLY EACH MONTH DEPENDING ON THE FIGURE OF THE COLLECTIONS FROM PATIENTS FOR A PARTICULAR MONTH,THAT THE COLLECTIONS AND DIV ISION THEREOF BETWEEN THE HOSPITAL AND HBCS COULD BY NO MEANS BE CONSTRUED PAYMENT OF SALARY FO R THE PURPOSES OF SECTION 192 OF THE ACT,THAT HBCS HAVE ALWAYS TREATED THE PAYMENTS FROM THE HOSP ITAL AS FEES FOR PROFESSIONAL SERVICES IN THE RETURNS OF INCOME FILED BY THEM,THAT THEY HAD BEEN ASSESSED AS SUCH,THAT THE ASSESSEE HAD BEEN FILING QUARTERLY TAX RETURNS ALL ALONG AND THERE HA D NEVER BEEN ANY CONTROVERSY UNTIL THE IMPUGNED ORDERS, WHICH WERE FIRST MADE IN MARCH 2011 FOR AY. S.2004-05 TO 2009-10 AND THEREAFTER IN FEBRUARY/MARCH 2012 FOR AY.S.2010-11 AND 2011-12. DEPARTMENTAL REPRESENTATIVE(DR)CONTENDED THAT THE APPOINTMENT LETTERS PROVIDED DURING SURVEY WERE VERY CRUCIAL IN ESTABLISHING EMPLOYEE-EMPLOYER RELATIONSHIP,THAT THE OBSERVATION OF FAA THAT-ONLY THOSE HBCS SHOULD BE CONSIDERED AS EMPLOY EE OF ASSESSEE WHEREIN MONITORING AND CONTROL ON CONTINUOUS BASIS WAS EXPLICITLY MENTIONE D IN THE APPOINTMENT LETTER-SUFFERED SERIOUS INFIRMITIES,THAT THERE COULD NOT BE A SINGLE CRITER IA TO DETERMINE THE EMPLOYEE-EMPLOYER RELATION - SHIP,THAT INTERNAL ARRANGEMENT OF HOLDING RESPONSIB ILITY AND ACCOUNTABILITY ON HBCS THROUGH RESPECTIVE HEADS OF DEPARTMENT (HOD) TO CHIEF ADMIN ISTRATOR OF THE HH WAS PROOF ENOUGH TO ESTABLISH MONITORING AND CONTROL ON CONTINUOUS BASI S,THAT CONTROL DID NOT NECESSARILY MEAN TELLING HOW TO DO THE THINGS PARTICULARLY IN CASE OF PROFES SIONALS LIKE DOCTORS, LAWYERS OR CHARTERED ACCOUNTANTS RATHER WHAT TO DO,THAT THE VISITING CON SULTANTS WERE SPARED BY AO FROM BEING SUBJECTED TO TDS U/S. 192B AS THEIR TERMS OF EMPLOY MENT HAD HARDLY ANY CONTROLLING/ SUPERVISING PROVISIONS,THAT THE AO HAD DEALT THE ISSUE PURELY O N MERIT,THAT THE CLAUSES RELATED TO APPLICABILITY OF LEAVE RULES,HOSPITAL MEDICAL STAFF RULES & REGUL ATIONS AND DEFINED WORKING HOUR ETC. POINTED TO THE EMPLOYER-EMPLOYEE RELATIONS, THAT DE CIDING THE TIMING, PLACING RESTRICTIONS ON FREEDOM TO PURSUE PROFESSION AS PER OWN WILL WITH A NY OTHER HOSPITALS WAS CERTAINLY WAYS OF ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 11 EXERCISING CONTROL.DR REFERRED TO THE PAPER BOOK (P B)SUBMITTED BY THE DEPARTMENT ESPECIALLY PAGE NUMBER 545 TO 598.HE CONTENTED THAT FROM THE T ABLE GIVEN ON PAGE NUMBER 545 AND 546 IT WAS CLEAR THAT MANY OF THE HBCS HAD BEEN ALLOTTED E MPLOYEE NUMBER AND WERE ALSO DEBARRED FROM TAKING ANY OTHER EMPLOYMENT EVEN DURING THEIR FREE TIME WHICH TANTAMOUNTED TO COMPLETE CONTROL,THAT THEY WERE EMPLOYEES AND NOT CONSULTANT S AS CLAIMED BY THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE BASIC CONTROVERSY BEFORE US IS WHETHER THERE WAS EMPLOYEE -EMPLOYER RELATIONSHIP BETWEEN THE ASSESSEE AND THE HBCS OR NOT AND WHETHER THE PROVISIONS OF S ECTION 192 OR 194J OF THE ACT WOULD BE APPLICABLE TO THE PAYMENTS MADE TO THE HBCS BY THE ASSESSEE.IN ANOTHER WORDS IF THE DOCTORS ARE TREATED AS EMPLOYEES,TAX DEDUCTION HAD TO BE MADE U NDER SECTION 192.ON THE OTHER HAD IF THEY ARE TREATED AS PROFESSIONALS TAX DEDUCTION WAS TO BE BE UNDER SECTION 194J OF THE ACT.THERE CANNOT BE ANY THUMB RULE IN THIS REGARD.CONSULTING DOCTORS CA N BE EMPLOYEES AS WELL AS PURE CONSULTANT. SO, EVERY MATTER HAS TO BE DECIDED WITH REFERENCE T O THE FACTS OF EACH CASE AND NOT BY NOMENCLATURE OR ON THE BASIS OF TWO OR THREE CLAUSE S OF AN AGREEMENT.TO RESOLVE THE ISSUE ENTIRE AGREEMENT HAS TO BE ANALYSED AND HAS TO BE TAKEN IN TO CONSIDERATION. BEFORE,REFERRING TO THE APPOINTMENT LETTER/ENGAGEME NT LETTER/OFFER LETTER ISSUED BY THE ASSESSEE TO HBCS,WE WILL LIKE TO REFER TO TWO OF THE CASES THAT DIRECTLY DEAL WITH THE IDENTICAL ISSUE.THE FIRST JUDGMENT WAS DELIVERED BY THE HONBLE AP HIGH COURT IN THE CASE OF YASHODA SUPER SPECIALITY HOSPITAL(365ITR356).IN THAT MATTER ISSUE BEFORE THE HONBLE COURT WAS AS TO WHETHER THE CONSULTANTS WORKING WITH THE HOSPITAL WERE EMPLOYEE S OR NOT AND WHETHER IN THE CASES TAX WAS TO BE DEDUCTED U/S.192 OR 194 J OF THE ACT.DECIDING TH E APPEAL,HONBLE COURT HELD AS UNDER: THE LEARNED TRIBUNAL AS WELL AS THE COMMISSIONER O F INCOME-TAX (APPEALS), ON FACTS AND ON EXAMINING THE DOCUMENTS 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 A T ANY POINT OF TIME AS FAR AS THEIR ATTENDANCE IS CONCERNED AND TREAT THE PATIENTS. IN THE AGREEME NT, THERE IS NO PROVISION 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 WH OLE, BOTH THE AUTHORITIES BELOW OBSERVED THAT THE EXISTENCE OF ONE PROHIBITORY CLAUSE, AS ST ATED ABOVE, DOES NOT CHANGE THE BASIC CHARACTER OF THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DO CTORS CONCERNED. ON FACTS, 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 UND ER SECTION 192 OF THE INCOME-TAX ACT. WE ARE OF THE VIEW THAT THE APPLICATION OF LAW DEPENDS UPO N THE APPRECIATION OF FACTS. THIS COURT IN EXERCISE OF THE JURISDICTION UNDER SECTION 260A OF THE INCOME-TAX ACT, CANNOT REAPPRECIATE THE FACTS OR SUBSTITUTE ITS OWN APPRECIATION WHEN APPRE CIATION 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 A 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. SECOND MATTER IS OF HONBLE GUJARAT HIGH COURT,DELI VERED IN THE CASE OF APOLLO HOSPITALS INTERNATIONAL LTD.(359ITR78).FACTS OF THE CASE WERE THAT IN RESPECT OF 15 CONSULTANT DOCTORS WHO WERE RENDERING SERVICES AT THE HOSPITAL,THE ASSESSE E WAS DEDUCTING TAX UNDER SECTION 194J OF THE ACT,TREATING THE PAYMENTS MADE TO THOSE DOCTORS AS PROFESSIONAL FEES.ON THE BASIS OF THE TERMS OF AGREEMENT BETWEEN THE HOSPITAL AND THE DOCTORS,THE AO TOOK THE VIEW THAT THERE EXISTED A ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 12 RELATIONSHIP OF EMPLOYER AND EMPLOYEE AND PAYMENTS MADE TO THE DOCTORS WERE IN THE NATURE OF FIXED SALARY AND, THEREFORE, THE PROVISIONS OF SECT ION 192 OF THE ACT WOULD APPLY. AS A RESULT, HE PASSED AN ORDER UNDER SECTION 201(1) AND (1A) OF TH E ACT RAISING A DEMAND FOR TAX AND INTEREST.IN THE APPELLATE PROCEEDINGS,THE FAA SET ASIDE THE ORD ER HOLDING THAT THE PAYMENTS IN QUESTION MADE TO THE DOCTORS WERE PROFESSIONAL FEES COVERED UNDER SECTION 194J OF THE ACT, AND THE TRIBUNAL DECIDED THE ISSUE AGAINST THE DEPARTMENT.D ISMISSING THE APPEAL FILED BY THE REVENUE, THE HONBBLE COURT HELD AS UNDER: THE HOSPITAL HAD 53 FULL-TIME RESIDENT-DOCTORS W HO WERE EMPLOYEES AND IN RESPECT OF PAYMENT TO THEM THE TAX WAS DEDUCTED AT SOURCE UNDER SECTIO N 192 OF THE ACT AND WAS REGULARLY PAID. THE PROFESSION TAX AND PROVIDENT FUND AMOUNTS WERE ALSO DEDUCTED FROM THEIR SALARIES. THE 15 DOCTORS IN QUESTION WERE ANOTHER SET OF DOCTORS REN DERING SERVICES AT THE HOSPITAL. THE FACTS ON RECORD BEFORE THE TRIBUNAL FURTHER INDICATED THAT T HE EMPLOYEE-DOCTORS WERE ELIGIBLE FOR GRATUITY AND WERE COVERED UNDER THE PROVIDENT FUND SCHEME, T HEY WERE ELIGIBLE FOR CASUAL LEAVE AND SICK LEAVE AND WERE GOVERNED BY GENERAL SERVICE RULES. A S AGAINST THAT, THE 15 CONSULTANT-DOCTORS IN QUESTION WERE NOT ENTITLED TO SUCH SERVICE BENEFITS AND FURTHER THEY WERE REQUIRED TO TAKE PROFESSIONAL INDEMNITY INSURANCE ON THEIR OWN. THE CONTRACT WITH THEM BY THE ASSESSEE WAS ONE OF CONTRACT FOR SERVICE AND NOT OF SERVICE. THEREF ORE, TAX WAS BEING RIGHTLY DEDUCTED AT SOURCE UNDER SECTION 194J AND SECTION 192 OF THE ACT HAD N O APPLICATION. THE FINDINGS AND CONCLUSIONS OF THE TRIBUNAL WERE PROPER. MOREOVER, THE CONSULTA NT DOCTORS HAD FILED THEIR INDIVIDUAL RETURNS OF THEIR INCOME SHOWING PROFESSIONAL FEES RECEIVED FROM THE ASSESSEE AND THEY HAD PAID TAX THEREON. THERE WAS THUS NO LOSS TO THE REVENUE. IN SUCH FACTS AND CIRCUMSTANCES, THE CHARGING INTEREST WAS NOT JUSTIFIED. 7.A. ANALYSIS OF THE ABOVE REFERRED TWO JUDGMENT LEAD TO THE CONCLUSION THAT TO DECIDE THE ISSUE OF 192/194 J CONTROVERSY FOLLOWING FACTORS SHOULD BE C ONSIDERED: I). ADMINISTRATIVE CONTROL OF HOSPITAL, II). REGULATION OF THE TIME FOR SERVICE IN THE HOSPITAL, III). ELIGIBLITY FOR GRATUITY AND COVER UNDER THE PROVID ENT FUND SCHEME, IV). BENEFIT OF CASUAL LEAVE AND SICK LEAVE, V). APPLICABITLITY OF GENERAL SERVICE RULES FRAMED BY T HE HOSPITAL. BESIDES,PROHIBITION FROM TAKING ANY OTHER ASSIGNMEN T DOES NOT JUSTIFY THE INFERENCE THAT THE PAYMENT TO THEM IS SALARY.ONE OF THE OTHER IMPORTAN T FACTOR IS FILING OF RETURN BY HBCS AND SHOWING THE SUM RECEIVED BY THEM FORM THE HOSPITALS -IT HAS TO BE SEEN WHETHER THEY ARE SHOWING THE RECEIPT FROM THE HOSPITAL UNDER THE HEAD SALARY OR UNDER THE HEAD PROFESSIONAL INCOME.IN ADDITION TO IT ONE OF THE IMPORTANT FACTOR IS INSUR ANCE TAKEN BY THE HBCS.IF THEY ARE NOT COVERED BY THE INSURANCE PROVIDED BY THE HOSPITAL AND THEY TAKE THE INDEMNITY INSURANCE FOR THEMSELVES IT INDICATES THAT THEY MIGHT NOT BE THE EMPLOYEE OF TH E ORGANISATION.BROADLY,THESE ARE THE SOME OF THE BASIC PARAMETERS. 8. WE HAVE COMPARED THE ENGAGEMENT LETTERS ISSUED BY T HE HH TO THE HBCS AND THE OTHER DOCTORS. IN THE FIRST CATEGORY TDS WAS MADE AS PER THE PROVI SIONS OF SECTION 194J OF THE ACT,WHEREAS IN THE SECOND CATEGORY TAX WAS DEDUCTED U/S.192 OF THE ACT.WE FIND THAT THE HBCS WERE NOT ALLOWED TO ANY KIND OF LEAVE,WHEREAS THE OTHER DOCT ORS WERE ELIGIBLE FOR PAID LEAVE @2.5DAY PER MONTH.THE JUNIOR DOCTORS WERE OFFERED SALARYIN TH E LETTERS OF ENGAGEMENT,BUT THE HBCS WERE GIVEN OFFER TO SHARE PROFESSIONAL FEESAT A FIX RA TE.IN THEIR LETTERS WORD SALARY WAS NOT USED AT ALL . BESIDES,THE HBCS WERE INFORMED THAT IN THEIR CASES IT WAS MANDATORY FOR THEM TO TAKE INDEMNITY INSURANCE TO ADEQUATELY COVER ANY MEDICO LEGAL PROB LEM.FOR PHSYSICIANS THE INSURANCE COVER TO BE TAKEN WAS OF RS.15 LAKHS AND FOR THE SURGEONS IT WAS OF RS.25 LAKHS.IN CASE OF JUNIOR DOCTORS SUCH CONDITION WAS NOT STIPUTLATED.THERE WAS NO PRO VISION FOR GRATUITY OR PF IN THEIR CASE. (PGS.150 TO 184 OF THE PB).IN SHORT,THERE ARE CERTA IN CLAUSES IN THE APPOINTMENT/OFFER LETTER THAT ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 13 DEAL WITH HBCS RIGHTS IN THE FIELDS OF CLINIC, ADM ITTING AND OPERATING,SHARING OF PROFESSIONAL FEES,EARMARKING OF % OF FEES FOR ATTENDING MEDICAL CONFERENCES /ACADEMIC WORK AND ALLOWING THEM TO CONTINUE ATTACHMENT.THE AO OR THE FAA HAD N OT DISCUSSED THESE ITEMS.AFTER CONSIDERING THE IMPORTANT PARAMETERS/GUIDING PRINCIPLES MENTION ED AS PARAGRAPH 7.A. AND THE TERMS OF AGREEMENTS ENTERED IN TO BETWEEN THE ASSESSEE AND T HE HBCS-ESPECIALLY THE TERM OF SHARING OF PROFESSIONAL FEES-AS WELL AS THE JUDGMENTS DELIVERE D BY THE HONBLE GUJARAT AND AP HIGH COURTS (SUPRA),WE ARE OF THE OPINION THAT PAYMENT MADE BY THE ASSESSEE TO THE HBCS WAS COVERED BY THE PROVISIONS OF SECTION 194 J OF THE ACT AND NOT BY S ECTION 192 OF THE ACT.GROUND NO. 1IS DECIDED IN FAVOUR OF THE ASSESSEE. 9. AS FAR AS THE GROUNDS NO.2 AND 3 ARE CONCERNED,WE A RE OF THE OPINION THAT SAME ARE NOT ARISING OUT OF THE ORDER OF THE FAA.THE ASSESSEE HAS NOT RA ISED THESE GROUND BEFORE THE FAA-A PERUSAL OF FORM NO.35 AND GROUNDS OF APPEAL RAISED BEFORE T HE FAA,CLEARLY SHOW THAT THESE ISSUES WERE NOT DISCUSSED AND DELIBERATED UPON BY HIM.SO,WE ARE ADJUDICATING THEM.REST OF THE GROUNDS ARE GENERAL IN NATURE. ITA/4938/MUM/2013,AY - 2009 - 10(APPEAL FILED BY THE AO): 10. NOW,WE WILL TAKE THE APPEAL FILED BY THE AO FOR THE YEAR UNDER CONSIDERATION.FIRST GROUND OF APPEAL(GOA-1.A)IS ABOUT THE DIRECTION GIVEN BY THE FAA WITH REGARD TO THE HBCS.WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE FOR THE Y EAR UNDER CONSIDERATION,WE HAVE ALREADY DECIDED THE ISSUE IN EARLIER PARAGRAPHS (PARA 7,7.A ,8).FOLLOWING THE SAME,WE HOLD THAT THE ORDER OF THE FAA WAS REASONABLE.WE DO NOT SEE ANY REASON TO INTERFERE WITH IT.GROUND NO.1 IS DECIDED AGAINST THE AO. 11 .NEXT THREE SUB-GROUNDS (1-B.,1-C.&1-D.) DEAL WITH SHORT DEDUCTION OF TAX.DURING THE COURSE OF SURVEY,IT WAS FOUND THAT THE ASSESSEE PAID RS. 1.02 CRORES,2.13 CRORES,RS.1.78 CRORES,RS.97.54 LAKHS RESPECTIVELY FOR THE AY.S.2008-09,2009-10,201 0-11 AND 2001-12 RESPECTIVELY TO HINDUJA FOUNDATION TOWARDS SALARY OF SOME SENIOR MANAGEMEN T,THAT IT HAD DEDUCTED TAX U/S.194 C OF THE ACT.AS PER THE AO TAX SHOULD HAVE BEEN DEDUCTED AS PER THE PROVISIONS OF SECTION 194 J.HE CALCULATED THE RATE DIFFERENCE 194 J-194C 28.96%)AT RS.19,10,202/- AND HELD THAT THERE WAS DEFAULT U/S.201(1)OF THE ACT.AS PER THE AO,IN ABSEN CE OF CERTAIN DETAILS LIABILITY U/S.201 (1A) COULD NOT BE QUANTIFIED. 11.A. GOA-1.C IS ALSO ABOUT THE CONTROVERSY WITH REGARD TO TAX TO BE DEDUCTED U/S.194C OR U/S.194 J OF THE ACT.DURING THE COURSE OF THE SURVE Y,IT WAS NOTICED THAT THE ASSESSEE HAD DEDUCTING TAXES U/S.194C OF THE ACT TOWARDS PAYMENT MADE TO HINDUJA TMT/HINDUJA GLOBAL SOLUTION LTD. TOWARDS CALL CENTER.THE AO WAS OF THE OPINION THAT THE ASSESSEE MADE PAYMENT FOR THE ACTIVITIES THAT REQUIRED HUMAN INTERVENTION S WITH SUPERIOR TECHNICAL SKILL AND THEREFORE SAME FELL UNDER THE CATEGORY OF TECHNICAL SERVICES. HE WAS OF THE OPINION THAT TAX SHOULD HAVE BEEN DEDUCTED @10%(U/S.194J)AND NOT@2%(U/S.194C) FO R THE PAYMENTS IN QUESTION.HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHY THE ABOVE TRANSAC TION WERE NOT SUBJECTED TO TDS U/S.194J OF THE ACT.AFTER CONSIDERING THE REPLY OF THE ASSESSEE HE HELD THAT PAYMENT MADE TO HINDUJA TMT/HINDUJA GLOBAL SOLUTION LTD. TOWARDS CALL CENTE R EXPENSES WAS NOT CONTRACT OF WORK IN SIMPLE TERMS,THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX U/S.194J INSTEAD OF 194C OF THE ACT ON ABOVE TRANSACTIONS.HE DETERMINED THE DIFFERENCE OF RS.5,60,479/- BETWEEN THE TAX DEDUCTED AT SOURCES AND THE TAX SHOULD HAVE BEEN DEDUCTED FOR T HE ABOVE TRANSACTION. ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 14 11.C. LAST ISSUE(GOA-1.D) IS ABOUT DRUG HANDING CHARGES.T HE AO FOUND THAT THE ASSESSEE HAD DEBITED A SUM OF RS.41,81,043/- UNDER THE HEAD DRUG HANDLING CHARGES TO M/S. SAXSONS BIOTECH. DURING THE COURSE OF SURVEY PROCEEDINGS, THE ASSESS EE WAS ASKED TO EXPLAIN THE NATURE OF PAYMENT.IN RESPONSE TO THE SAME,IT WAS STATED THAT PAYMENT HAD BEEN MADE FOR THE PURPOSE OF ARRANGING CONSUMABLES WHICH WERE NOT ORDINARILY AVA ILABLE IN MARKET,THAT THE RELATIONSHIP WAS PURELY CONTRACTUAL,THAT TAX WAS BEING DEDUCTED U/S. 194C OF THE ACT.AO WAS OF THE OPINION THAT THE ASSESSEE HAD MADE PAYMENT TO A PARTY WHICH WAS NOTHING BUT AN AGENT(ACTING ON BEHALF OF ASSESSEE)FOR A FIXED SUM I.E. COMMISSION.HE HELD TH AT THE ASSESSEE SHOULD HAVE DEDUCTED TAX AS PER THE PROVISIONS OF SECTION 194H OF THE ACT.HE CA LCULATED THE SHORTFALL OF RS.3.74 LAKHS ON ACCOUNT OF RATE DIFFERENCE(194J-194C@8.96% )FOR PAY MENT OF RS.41.81 LAKHS,U/S.201(1)OF THE ACT.THE AO CONSIDERED THE APPLICABILITY OF THE TAX DEDUCTION PROVISIONS AND HELD THAT THE PAYMENTS MADE IN RESPECT OF ALL THE ABOVE SERVICES TO THE CONCERNED PARTIES WERE IN THE NATURE OF 'FEES FOR TECHNICAL OR PROFESSIONAL SERVICES'. HENC E, THE APPELLANT WAS REQUIRED TO DEDUCT TAX AT SOURCE AS PER THE PROVISIONS OF SECTION 194J OF THE ACT. SINCE THE TAX WAS NOT SO DEDUCTED (AND WAS DEDUCTED ONLY UNDER SECTION 194C), THE AO HELD THE APPELLANT TO BE AN ASSESSEE IN DEFAULT AND ACCORDINGLY RAISED THE DEMAND OF TAX ON ACCOUNT OF SHORT DEDUCTION. 12. AGGRIEVED BY THE ORDER OF THE AO,THE FAA FILED AN A PPEAL BEFORE THE FAA.AFTER CONSIDERING THE ORDER OF THE AO,THE SUBMISSIONS OF THE ASSESSEE AND THE NATURE OF JOBS/SERVICES CARRIED OUT BY THE SERVICE PROVIDERS, HE HELD THAT PAYMENTS WAS MA DE TO HINDUJA FOUNDATION IN FORM OF THE SALARIES OF SENIOR MANAGEMENT PERSONNEL DEPUTED TO THE ASSESSEE-HOSPITAL, THAT FOUNDATION HAD DEPUTED VARIOUS PERSONNEL TO THE HOSPITAL TO WORK I N THE CAPACITIES OF CEO,DIRECTOR(PROFESSIONAL SERVICES), DIRECTOR(ADMINISTRATION),DIRECTOR(FINANC E),DIRECTOR(MEDICAL EDUCATION & HOSPITAL QUALITY)ETC., THAT SUCH PERSONNEL HAD WORKED FOR TH E ASSESSEE-HOSPITAL BUT WERE ON THE PAYROLLS OF THE FOUNDATION,THAT THEY GOT ALL BENEFITS FROM THE FOUNDATION,THAT THE FOUNDATION RAISED DEBIT NOTES TOWARDS THE ACTUAL COST OF THEIR EMPLOYMENT A ND ACCORDINGLY THE HINDUJA HOSPITAL MADE THE PAYMENT TO THE SAID FOUNDATION,THAT THE PAYMENT S MADE BY THE APPELLANT WERE IN THE NATURE OF PURE REIMBURSEMENTS,THAT THE FOUNDATION CHARGED ONL Y THE ACTUALS FROM THE ASSESSEE,THAT HINDUJA FOUNDATION WAS ALSO A TRUST,THAT THE PAYMENTS MADE BY THE ASSESSEE IN RESPECT OF THE PERSONS DEPUTED BY THE FOUNDATION FOR THE ASSESSEE- HOSPIT AL WERE NOT IN THE NATURE OF 'FEES FOR PROFESSIONAL SERVICES'.HE DELETED THE ADDITION MADE BY THE AO. 12.1. REGARDING PAYMENT TO HINDUJA TMT/HINDUJA GLOBAL SOL UTIONS LTD TOWARDS CALL CENTRE EXPENSES,THE FAA HELD THAT THE WORK INCLUDED PRIMAR ILY PROVIDING THE CUSTOMERS THE INFORMATION PERTAINING TO THE HOSPITAL & FIXING APPOINTMENT,THA T APPOINTMENT LIST CONTAINED NAMES OF VARIOUS DEPARTMENTS/CONSULTANTS,THAT THE CALL CENTR E WOULD GIVE APPOINTMENTS AND INSTRUCTIONS IF ANY TO THE CALLERS,THAT HTMT GLOBAL SOLUTIONS ALSO PROVIDED THE INFORMATION ABOUT THE CLINICS, LABS,IMAGING,BLOOD BANK, REPORT AVAILABILITY,AMBULA NCE SERVICES, ADMISSION & BILLING ETC., THAT HTMT GLOBAL SOLUTION WOULD RAISE THE INVOICE ON MONTHLY BASIS AS PER THE TERMS OF THE CONTRACT,THAT THE SERVICES INVOLVED ARE NOT TECHNIC AL OR PROFESSIONAL NATURE,THAT SAME WERE IN THE NATURE OF 'WORKS CONTRACT'. 12.2. ABOUT THE PAYMENT MADE TO SAXONS BIOTECH(SB) BY THE ASSESSEE TOWARDS DRUG HANDLING CHARGES, THE FAA HELD THAT SUCH PAYMENT WERE MADE T OWARDS SUPPLY OF DRUGS,THAT SAXONS ARRANGED A PARTICULAR DRUG,WHICH WAS NOT ORDINARILY AVAILABLE IN THE MARKET,THAT IT WAS A RADIOACTIVE MATERIAL REQUIRED IN NUCLEAR MEDICINE T REATMENT,THAT SB SUPPLIED THE MEDICINE TO THE ASSESSEE AT A PARTICULAR PRICE AND THE QUANTITY,THA T THE CHARGES INVOICED BY THE SUPPLIER INCLUDED THE COST OF MATERIAL, FREIGHT, CUSTOMS DUTY AND THE CLEARING & FORWARDING CHARGES, DELIVERY ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 15 CHARGES,THAT SB WOULD SEND THE DRUG ON A WEEKLY BAS IS AS PER THE REQUIREMENT,THAT THE INVOICE CONSISTED OF TWO PARTS ONE WAS ACTUAL COST OF MATER IAL SUPPLIED ON WHICH NO TDS WAS RECOVERED AND THE OTHER PART WAS THE SERVICE CHARGES ON WHICH TAX WAS DEDUCTED U/S 194C,THAT THE SERVICES INVOLVED WERE NOT IN THE NATURE OF 'PROFESSIONAL OR TECHNICAL SERVICES',THAT THE PROVISIONS OF SECTION 194J WOULD NOT BE APPLICABLE. 13. BEFORE US,THE DR SUPPORTED THE ORDER OF THE AO,WHER EAS THE AR RELIED UPON THE ORDER OF THE FAA.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD.WE FIND THAT THE HINDUJA FOUNDATION HAD DEPUTED VARIOUS PERSONNEL TO THE HOSPITAL FOR PERFORMING DUTIES OF SENIOR MANAGERIAL POSTS AND DEBIT NOTES WERE BEING PREPARED FOR SUCH SERVICES.ALL THE OFFICERS WERE ON THE PAY-ROLL OF THE FOUNDATION.IN THESE CIR CUMSTANCES,WE ARE OF THE OPINION THAT PAYMENTS MADE BY THE ASSESSEE WERE NOT THE NATURE O F FEE FOR TECHNICAL SERVICES AND THE ASSESSEE HAD RIGHTLY DEDUCTED TAX UNDER SECTION 194J OF THE ACT.CONFIRMING THE ORDER OF THE FAA,WE DECIDE GOA 1.B.AGAINST THE AO. 13.1. AS FAR AS PAYMENTS MADE TO HINDUJA TMT/HINDUJA GLOB AL SOLUTIONS LTD TOWARDS CALL CENTRE EXPENSES ARE CONCERNED,WE ARE OF THE OPINION THAT A CTIVITIES CARRIED OUT BY BOTH THE ENTITIES DO NOT FALL UNDER THE HEAD TECHNICAL OR PROFESSIONAL S ERVICES.THEREFOE,THE FAA WAS JUSTIFIED IN HOLDING THAT TAX WAS CORRECTLY DEDUCTED U/S.194 C O F THE ACT.WE DO NOT FIND ANY LEGAL INFIRMITY IN HIS ORDER.THEREFORE,UPHOLDING HIS ORDER,GOA-1.C. IS DECIDED AGAINST THE AO. 13.2. WHILE DECIDING THE GOA-1.D.,THE FAA HAS GIVEN A CAT EGORICAL FINDING OF FACT THAT PAYMENT MADE TO SB BY THE ASSESSEE TOWARDS DRUG HANDLING CH ARGE WERE MADE TOWARDS SUPPLY OF DRUGS, THAT SB SUPPLIED A PARTICULAR MEDICINE TO THE ASSES SEE AT A PARTICULAR PRICE AND THE QUANTITY,THAT THE CHARGES INVOICED BY THE SUPPLIER INCLUDED THE C OST OF MATERIAL, FREIGHT, CUSTOMS DUTY AND THE CLEARING & FORWARDING CHARGES, DELIVERY CHARGES,THA T THE INVOICE CONSISTED OF TWO PARTS ONE WAS ACTUAL COST OF MATERIAL SUPPLIED ON WHICH NO TDS WA S RECOVERED AND THE OTHER PART WAS THE SERVICE CHARGES ON WHICH TAX WAS DEDUCTED U/S.194C, THAT THE SERVICES INVOLVED WERE NOT IN THE NATURE OF 'PROFESSIONAL OR TECHNICAL SERVICES.CONSI DERING THESE FACTS WE ARE OF THE OPINION,THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY.SO,UPHOLDING HIS ORDER,WE DECIDE GROUND NO.1.D.AGAINST THE AO. ITA/5061/MUM/2013,AY.2009-10: 14. NOW WE WOULD TAKE THE CROSS-APPEALS WITH REGARD TO CHARGING OF INTEREST U/S.201(1A)OF THE ACT.WHILE PASSING ORDER U/S.201(1)OF THE ACT,ON 24 TH 2011,FOR THE YEAR UNDER CONSIDERATION,THE AO HELD THAT THERE WAS SHORT DEDUCTION OR NO DEDUCT ION OF TAXES WITH REGARD TO FOLLOWING PAYMENTS: REMUNERATION TO HBCS.(RS.11.69 CRORES),PAYMENT TO H INDUJA FOUNDATION(RS.19.10LAKHS), TDS U/S.194C VS.194J OF THE ACT(RS.1.04 CRORES)AND DRUG HANDLING CHARGES(RS.3.74 LAKHS). AS PER THE AO,AT THE TIME OF PASSING THE ORDER U/S. 201 (1)THE ASSESSEE HAD NOT SUPPLIED CERTAIN DETAILS ABOUT AMOUNT AND DATE OF PAYMENT OF TAXES B Y HBCS.VIDE HIS LETTER DATED 17.03.2011 THE AO AGAIN CALLED FOR DETAILS IN THIS REGARD.AS PER T HE AO TILL 28.09.2011,THE ASSESSEE HAD NOT FURNISHED ANY DETAILS,EXCEPT FOR CERTAIN CONFIRMATI ON LETTERS.HE FURTHER MENTIONED THAT THE ASSESSEE HAD NOT FILED COPIES OF THE RETURNS OF INC OME FILED BY THE HBCS,THAT FILING OF SELF SERVING ALLEGED CONFIRMATION DID NOT SERVE ANY PURPOSE,THAT SAME DID NOT HAVE ANY EVIDENTIARY VALUE,THAT THE LETTERS FROM THE HBCS DID NOT EXPLAIN AS TO HOW THE INCOME UNDER QUESTION HAD BEEN ACCOUNTED FOR BY THE HBCS,THAT IT WAS NOT KNOWN AS TO HOW AND WHEN THE TAX LIABILITY ON THE RECEIPT IN QUESTION HAD BEEN DISCHARGED,THAT THE CO NFIRMATORY LETTERS HAD BEEN PLACED ON RECORD ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 16 FROM 63 DOCTORS ONLY,THAT OUT OF THAT FIVE DOCTORS DID NOT FIGURE IN THE LIST OF 129 DOCTORS PROVIDED AT THE TIME OF PROCEEDINGS U/S.201(1)OF TH E ACT.HE SUMMARISED THE FACTS AT PAGES NO 6 AND 7 OF HIS ORDER.FINALLY,HE HELD THAT THE ASSESSE E HAD FAILED TO DISCHARGE ITS ONUS EVEN AFTER ALLOWING IT MORE THAN SIX MONTHS OF TIME,THAT THE A SSESSEE HAD NO MORE EXPLANATION /EVIDENCE TO OFFER.TAKING 31 ST MARCH OF THE FY.FOR THE YEAR UNDER CONSIDERATION A S CUT-OFF DATE FOR THE ORDER U/S.201(1A)OF THE ACT,THE AO CALCULATED INTEREST LI ABILITY,FOR THIRTY MONTHS PERIOD,AS UNDER: I.REMUNEARATION TO HBCS.(3.50CRORES),II.PAYMENT TO HINDUJA FOUNDATION(5.73 LAKHS)III.194C VS.194J ISSUE(31.46 LAKHS),IV.DRUG HANDLING CHARGES (1.12 LAKHS). 15 .THE ASSESSEE CHALLENGED THE ORDER OF THE AO,BEFORE THE FAA.AFTER CONSIDERING THE ORDER OF THE AO AND THE SUBMISSIONS OF THE ASSESSEE,THE FAA HELD THAT CHARGING OF INTEREST WAS CONSEQUENTIAL IN NATURE, THAT HE HAD DECIDED THE AP PEAL WITH REGARD TO DEMAND RAISED U/S.201(1)OF THE ACT,THAT AO SHOULD DECIDE THE ISSUE AS PER LAW. 16. BEFORE US,THE AR STATED THAT THE ISSUE OF LEVYING O F INTEREST WAS NOT CONSEQUENTIAL IN NATURE, THAT THE ASSESSEE HAS RAISED SEVEN GROUNDS OF APPEA L,THAT THE FAA DID NOT PASS SPEAKING ORDER. DR CONTENDED THAT THE ASSESSEE HAD NOT SUPPLIED INF ORMATION TO THE AO THOUGH IT WAS GIVEN MORE THAN ONE OPPORTUNITY TO FILE DETAILS. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WHILE DECIDING THE APPEAL FILED BY THE ASSESSEE AND THE AO WE HAVE HEL D THAT THERE WAS NO DEFAULT ON PART OF THE ASSESSEE IN DEDUCTING TAX AT SOURCE WITH REGARD TO PAYMENTS MADE TO HBCS,FOUNDATION, HINDUJA TMT/ HINDUJA GLOBAL SOLUTIONS LTD.,DRUG HANDLING CH ARGES.IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT THERE IS NO JUSTIFICATION IN LEVYI NG INTEREST AS PER THE PROVISIONS OF SECTION 201(1A) OF THE ACT.THE ASSESSEE CANNOT BE TREATED A -I-D.WE DECIDE THE EFFECTIVE GROUND OF APPEAL RAISED BY THE ASSESSEE IN ITS FAVOUR AND THE GROUND RAISED BY THE AO IS DECIDED AGAINST HIM. ITA NOS.5062 &5063/MUM/2013-AY.2010-11,2011-12 17. EFFECTIVE GROUNDS OF APPEAL FILED BY THE ASSESSEE I N THE APPEALS FILED BY THE ASSESSEE FOR THE AY.S.2010-11 AND 2011-12 ARE IDENTICAL TO THE GROUN DS OF AY.2009-10 I.E.PAYMENT MADE TO HBCS.WHILE DECIDING THE APPEAL FOR THAT YEAR,WE HAV E DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE.FOLLOWING THE SAME GROUND NO.1,FOR BOTH TH E YEARS,IS DECIDED IN ASSESSEES FAVOUR. REST OF THE GROUNDS ARE DECIDED AGAINST THE ASSESSEE. ITA NOS.4939 &4940/MUM/2013-AY.2010-11,2011-12 18. IN THE APPEALS FILED BY THE AO,FOR THE ABOVE MENTIO NED TWO AY.S.HE HAS RAISED THE GROUNDS OF PAYMENT MADE TO HBCS,TO HINDUJA FOUNDATION,TO HINDU JA TMT/ HINDUJA GLOBAL SOLUTIONS LTD. AND PAYMENTS MADE UNDER THE HEAD DRUG HANDLING CHAR GES.WE HAVE ALREADY DECIDED THE ISSUE AGAINST THE AO,WHILE DECIDING THE APPEAL FOR THE AY .2009-10.FOLLOWING THE SAME,ALL THE GROUNDS OF APPEAL RAISED BY THE AO ARE DECIDED AGAINST HIM. AS A RESULT,APPEALS FILED BY THE ASSESSEE ARE PARTL Y ALLOWED AND THE APPEALS OF THE AO STAND DISMISSED. 06 /0 2 7 8 506 (90 2 # 0 : ; /0 2 8 #< 2 # 0 : . ORDER PRONOUNCED IN THE OPEN COURT ON 6TH, FEBRUARY,2015 . '$5 '$5 '$5 '$5 2 22 2 3) 3) 3) 3) $ $ $ $ % % % % 8 88 8 =' =' =' =' 06.02. 201 5 2 22 2 4 44 4 > >> > ITA/5060/&OTHERS/MUM/2013/NHES-HH/2009-10-11-12 17 SD/- SD/- ( . / D.MANMOHAN) ( #$%& #$%& #$%& #$%& / RAJENDRA) !' / VICE PRESIDENT $ $ $ $ '( '( '( '( /ACCOUNTANT MEMBER / MUMBAI, =' /DATE: 06.02.2015. SK '$5 '$5 '$5 '$5 2 22 2 -0? -0? -0? -0? @$?)0 @$?)0 @$?)0 @$?)0 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / +, 2. RESPONDENT / -.+, 3. THE CONCERNED CIT(A)/ A B , 4. THE CONCERNED CIT / A B 5. DR F BENCH, ITAT, MUMBAI / ?7 4 -0 Q QQ Q , . . % . 6. GUARD FILE/ 4 . ?0 . ?0 . ?0 . ?0 -0 -0-0 -0 //TRUE COPY// '$5 / BY ORDER, / # DY./ASST. REGISTRAR , /ITAT, MUMBAI