DCIT TDS 1(1), MUMBAI V. ASIAN HEART INSTITUTE & RESEARCH ENTRE P.LTD, MUMBAI

ITA 7051/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3112 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LAKSHMI HANDE PURI
• Keywords: Charitable institution
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 7051/MUM/2012 (ASSESSMENT YEAR : 2008-09) ITA NO.7052/MUM/2012 (ASSESSMENT YEAR : 2009-10) ITA NO.7053/MUM/2012 (ASSESSMENT YEAR : 2010-11) ITA NO.7054/MUM/2012 (ASSESSMENT YEAR : 2011-12) DCIT (TDS)-1(1), 8 TH FLOOR, KG MITTAL AYURVEDIC HOSPITAL BUILDING,CHARNI ROAD, MUMBAI 400002 ... APPELLANT VS. ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. GN BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400051 .... RESPONDENT ITA NO. 7177/MUM/2012 (ASSESSMENT YEAR : 2008-09) ITA NO.7178/MUM/2012 (ASSESSMENT YEAR : 2009-10) ITA NO.7179/MUM/2012 (ASSESSMENT YEAR : 2010-11) ITA NO.7180/MUM/2012 (ASSESSMENT YEAR : 2011-12) ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. GN BLOCK, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400051 .... APPELLANT 2 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. VS. DCIT (TDS)-1(1), 8 TH FLOOR, KG MITTAL AYURVEDIC HOSPITAL BUILDING,CHARNI ROAD, MUMBAI 400002 ... RESPONDENT REVENUE BY : MS. LAKSHMI HANDE PURI ASSESSEE BY : SHRI VIMAL PUNMIYA DATE OF HEARING : 06/08/2015 DATE OF PRONOUNCEMENT : 30/09/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED ARE A GROUP OF EIGHT APPEALS, FOUR E ACH BY THE ASSESSEE AND THE REVENUE RELATING TO ASSESSMENT YEA RS 2008-09 TO 2011-12. SINCE THE APPEALS RELATE TO THE SAME ASSE SSEE AND INVOLVE COMMON ISSUES, THEY HAVE BEEN CLUBBED AND HEARD TOG ETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ALL THE APPEALS ARE DIRECTED AGAINST A COMMON ORDER PASSED BY THE CIT(A) DATED 29/08/2012 FOR ASSESSMENT YEARS 20 08-09 TO 2011-12, WHICH IN TURN HAS ARISEN FROM THE RESPECTIVE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 201(1)/201(1A) OF T HE INCOME TAX ACT, 1961( IN SHORT THE ACT) DATED 22/3/2011 HOLDING T HE ASSESSEE AS AN ASSESSEE IN DEFAULT FOR SHORT DEDUCTION OF TAX AT S OURCE ON CERTAIN PAYMENTS. SINCE THE ISSUES ARE COMMON IN ALL THE F OUR ASSESSMENT YEARS, THE CROSS APPEALS OF THE ASSESSEE AND THE RE VENUE FOR 3 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. ASSESSMENT YEAR 2008-09, BEING ITANO. 7177/MUM/2012 & 7051/MUM/2012 RESPECTIVELY ARE TAKEN UP AS THE LEAD APPEALS. 3. FIRST, WE MAY TAKE UP THE APPEAL OF THE ASSESSEE , WHEREIN THE PRIMARY DISPUTE RELATES TO THE TAX LIABLE TO BE DED UCTED AT SOURCE ON PAYMENT MADE TO THE DOCTORS, WHO ARE DESCRIBED AS FULL TIME CONSULTANTS (HEREAFTER REFERRED TO AS FTCS). THE ASSESSEE BEFORE US IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMP ANIES ACT, 1956 AND IS ENGAGED IN RUNNING A SUPER SPECIALTY CARDIAC HOSPITAL AT BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI. IN THE COURSE O F RUNNING ITS HOSPITAL, THE ASSESSEE EMPLOYS TWO TYPES OF DOCTORS , VIZ. FTCS AND PANEL DOCTORS. FTCS WERE PAID PROFESSIONAL FEE, ON WHICH ASSESSEE DEDUCTED TAX AT SOURCE IN TERMS OF THE PROVISIONS OF SECTION 194J OF THE ACT. THE ASSESSING OFFICER ANALYZED TERMS OF EMPLOYMENT OF T HE FTCS AND OBSERVED THAT ASSESSEE COMPANY EXERCISED SUCH CONTR OL OVER THESE CONSULTANTS THAT THEY DID NOT ENJOY ANY INDEPENDENT STATUS OF A CONSULTANT, BUT THEY ACT AS AN EMPLOYEE OF THE ASSE SSEE COMPANY. THE ASSESSING OFFICER CONCLUDED THAT IN RESPECT OF THE REMUNERATION PAID TO THE FTCS, THERE WAS AN EMPLOYER-EMPLOYEE RELATIONSH IP AND THUS, ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE IN TE RMS OF THE PROVISIONS OF SECTION 192 OF THE ACT. IN OTHER WORDS, AS PER THE ASSESSING OFFICER THE PAYMENTS MADE BY THE ASSESSEE COMPANY TO SUCH F TCS WERE IN THE NATURE OF SALARY AND HENCE TAX WAS REQUIRED TO BE DEDUCTED UNDER SECTION 192 OF THE ACT. AS A CONSEQUENCE OF THE AF ORESAID, THE ASSESSING OFFICER HELD THAT ASSESSEE HAD SHORT DEDU CTED THE TAX AT SOURCE ON PAYMENT OF REMUNERATION TO FTCS AND ACCOR DINGLY, HE HELD THE ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTI ON 201(1) OF THE ACT 4 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. AND SUCH SHORTFALL WAS DETERMINED AT RS.4,61,25,376 /- AND THE RELATED INTEREST CHARGEABLE UNDER SECTION 201(1A) OF THE AC T WAS DETERMINED AT RS.2,21,40,180/- IN RELATION TO THE ASSESSMENT YEAR 2008-09. 3.1 IN APPEAL BEFORE CIT(A) ASSESSEE CONTENDED THAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN FTCS DOCTORS AND THE ASSESSEE AND THE DISTINCTION BETWEEN THE TWO WAS SO UGHT TO BE CANVASSED ON THE BASIS OF THE FOLLOWING POINTS. TH AT THE PROFESSIONAL FEE WAS PAID TO FTCS DOCTORS ON CASE TO CASE BASIS AS PER THE POLICY OF THE HOSPITAL; THAT THE FEE COLLECTED FROM THE PATIE NTS WAS ALSO SUBJECT TO DEDUCTION AS THE SHARE OF THE HOSPITAL; THAT THE CO LLECTION OF FEE DEPENDED DIRECTLY ON THE PATIENTS ATTENDED TO BY TH E CONCERNED DOCTOR AND AS A RESULT THE INCOME OF THE DOCTOR WAS NOT FI XED BUT IT VARIED FROM MONTH TO MONTH; THAT FTCS DOCTORS WERE NOT ENTITLE D FOR ANY RETIREMENT BENEFITS OR OTHER BENEFITS LIKE PROVIDEN T FUND, GRATUITY, BONUS ETC.; THAT FTCS DOCTORS WERE NOT ENTITLED FOR ANY TYPE OF LEAVE SUCH AS PERSONAL LEAVE OR CASUAL LEAVE OR COMPENSA TION IN LIEU OF SUCH LEAVE; THAT APPOINTMENT OF FTCS DOCTORS WAS FOR ONE YEAR ONLY AND THE CONTRACT WAS SUBJECT TO RENEWAL EVERY YEAR; THAT FT CS DOCTORS HAVE A RIGHT TO ADMIT PATIENTS AND RECOVERY OF THE HOSPITA L BILLS WERE ALSO THEIR RESPONSIBILITY; THAT EVEN IN CASES WHERE FTCS DOCTO RS ARE RETAINED ON A MINIMUM GUARANTEE AMOUNT PLUS AMOUNT PAYABLE ON CAS E TO CASE BASIS, IT WOULD SHOW THAT THE INCOME OF SUCH DOCTORS WA S NOT CONSISTENT BUT VARIED FROM MONTH TO MONTH; AND, THAT THE FTCS DOCT ORS HAD A RIGHT TO ADMIT PATIENTS UNDER THEM DIRECTLY TO THE HOSPITAL; AND THAT THEY WERE BOUND BY CERTAIN ADMINISTRATIVE RULES, WHICH WAS FO R THE PURPOSE OF DISCIPLINE, REGULARITY AND ACCOUNTABILITY TO THE P ATIENTS THROUGH AN 5 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. AGREEMENT ENTERED INTO AND THERE WAS NO EMPLOYER-E MPLOYEE RELATIONSHIP WAS ESTABLISHED BETWEEN THE ASSESSEE COMPANY AND THE DOCTORS. SIMILARLY, IT WAS POINTED OUT THAT IT WAS ONLY FOR THE PURPOSE OF DISCIPLINE AND ADHERENCE TO THE TIMINGS THAT THE DO CTORS WERE REQUIRED TO REPORT FOR CERTAIN NUMBER OF HOURS AT THE HOSPIT AL. THE CIT(A) HOWEVER WAS NOT CONVINCED WITH THE SUBMISSIONS PUT- FORTH BY THE ASSESSEE. THE CIT(A) NOTICED THAT THE FEATURES OF APPOINTMENT OF FTCS DOCTORS BROUGHT OUT BY THE ASSESSING OFFICER ESTABL ISHED THAT IT WAS A CASE WHERE EMPLOYER EMPLOYEE RELATIONSHIP EXISTED BETWEEN THE ASSESSEE COMPANY AND FTCS DOCTORS. IN PARA 6.6 OF THE IMPUGNED ORDER, THE CIT(A) SPECIFICALLY NOTED THAT THE FTCS DOCTORS WERE SUPPOSED TO SUPERVISE THE WORK OF THE STAFF; THAT T HEY WERE NOT SUPPOSED TO BE ENGAGED IN COMPETING OR CONFLICTING PROFESSION OR BUSINESS; ATTACHMENT TO ANY OTHER HOSPITAL WAS P ROHIBITED; THAT THE RECORDING OF ATTENDANCE WAS MANDATORY; THAT THERE W AS RESTRICTIONS REGARDING USE OF INFORMATION/RESULTS OF CLINICAL RE SEARCH OUTSIDE ASSESSEES HOSPITAL; AND, THAT A NOTICE OF THREE MO NTHS WAS REQUIRED TO TERMINATE THE ARRANGEMENT BETWEEN THE ASSESSEE AND THE DOCTORS. AS PER THE CIT(A), IN THE APPOINTMENT LETTER OF FTCS D OCTORS THERE WAS A STANDARD CLAUSE WHICH STATED THAT THE DOCTOR WAS TO BE GOVERNED BY THE BYE-LAWS AND THE GENERAL RULES AND REGULATIONS OF THE APPELLANT HOSPITAL. IN THIS MANNER, THE CIT(A) CONCLUDED THA T THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE FTCS DOCTORS WAS PUREL Y THAT OF AN EMPLOYER AND EMPLOYEE AND THE REMUNERATION PAID TO THEM AS A RESULT OF SAID RELATIONSHIP WAS IN THE NATURE OF SALARY, WHICH WOULD ATTRACT THE PROVISIONS OF SECTION 192 OF THE ACT. IN THIS MANNER THE CIT(A) HAS 6 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. AFFIRMED THE ACTION OF THE ASSESSING OFFICER AGAINS T WHICH ASSESSEE IS IN APPEAL BEFORE US. 3.2 AGAINST THE AFORESAID STAND OF THE LOWER AUTHOR ITIES THE LD. REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT THE REMUNERATION PAID BY THE ASSESSEE TO THE FTCS DOCTO RS WAS NOT IN THE NATURE OF SALARY TO BE CONSIDERED UNDER SECTION 192 OF THE ACT AND, RATHER IT WAS IN THE NATURE OF PROFESSIONAL FEE ON WHICH TAX WAS LIABLE TO BE DEDUCTED UNDER SECTION 194J OF THE ACT. FIRSTL Y, THE LD. REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE TENURE OF APPOINTMENT OF ALL FTCS DOCTORS WAS FOR A PERIOD OF ONE YEAR, WHICH WAS RENEWABLE ON AN YEARLY BASIS DEPENDING ON HIS PERFORMANCE WHICH WAS SUBJECT TO THE MEDICAL ADVISORY COUNCIL O F THE APPELLANT HOSPITAL. IT WAS CONTENDED THAT IN A CASE OF AN E MPLOYEE TO WHOM SALARY IS BEING PAID, THE APPOINTMENT IS NOT FOR A FIXED PERIOD. SECONDLY, IT WAS POINTED OUT THAT NONE OF THE FTCS DOCTORS ARE ELIGIBLE FOR ANY BENEFITS SUCH AS ENCASHMENT OF LEAVE, GRATU ITY, CONTRIBUTION TO PROVIDENT FUND, SUPERANNUATION, ETC., WHEREAS THE E MPLOYEES ARE GIVEN SUCH BENEFITS. THIRDLY, ALL THE FTCS DOCTORS ARE R EQUIRED TO MAINTAIN INDEMNITY INSURANCE AT THEIR OWN COST DURING THE PE RIOD OF CONTRACT WITH THE ASSESSEE HOSPITAL, WHEREAS IN THE CASE OF EMPLOYEES SUCH INSURANCE IS THE RESPONSIBILITY OF THE ASSESSEE. F OURTHLY, IT IS POINTED OUT THAT RESPONSIBILITY OF COLLECTION OF FEE IS ON THE CONSULTANT AND IF THE AMOUNT IS NOT RECEIVED, THE CONSULTANTS DO NOT GET THEIR PAYMENTS. SUCH A CLAUSE IS COMPLETELY MISSING IN A CASE WHERE ASSESSEE HAS EMPLOYED FULL TIME EMPLOYEES. FIFTHLY, THE EMPLOYE ES OF THE ASSESSEE ARE ELIGIBLE FOR SPECIFIC NUMBER OF LEAVES DURING T HEIR TENURE, FOR 7 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. EXAMPLE PRIVILEGE LEAVES, CASUAL LEAVE, SICK LEAVE, ETC., WHEREAS NO SUCH BENEFITS ARE AVAILABLE FOR THE FTCS DOCTORS. SIXT HLY, IT IS POINTED OUT THAT REMUNERATION PAID TO FTCS DOCTORS VARIES FROM MONTH TO MONTH AND DEPENDS ON THE PATIENTS ATTENDED TO BY THE DOCT ORS, WHICH IS NOT SO IN THE CASE FOR FULL TIME EMPLOYEES. SEVENTHLY , IT IS POINTED OUT THAT THE APPOINTMENT LETTERS OF THE FTCS DOCTORS CLEARLY POINT OUT THAT IT IS A CONTRACT FOR SERVICE AND NOT A CONTRACT OF SERVI CE SO AS TO SUGGEST ANY EMPLOYEE-EMPLOYER RELATIONSHIP. NEXT, IT IS POINTE D OUT THAT THE EMPLOYEES ARE PAID THEIR SALARIES OR WAGES ON OR B EFORE 7 TH OF THE MONTH, WHEREAS THE FTCS DOCTORS ARE PAID THEIR REMU NERATION ONLY AFTER THE REALIZATION OF FEES FROM THE PATIENTS. NEXT, IT IS POINTED OUT THAT THE RESTRICTION REFERRED TO BY THE CIT(A) IN T HE APPOINTMENT LETTER OF FTCS DOCTORS ARE STATED ONLY TO ENSURE DISCIPLIN E AND CONTROL AND FOR SMOOTH FUNCTIONING OF THE HOSPITAL AND TO ENSURE MI NIMUM INCONVENIENCE TO THE PATIENTS. APART FROM THE AFOR ESAID FACTUAL ASSERTIONS, THE LD. REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE FOLLOWING JUDGMENTS TO SUPPORT HIS PLEA THAT THE PA YMENTS TO THE FTCS WAS IN THE NATURE OF PROFESSIONAL FEE ON WHICH TAX IS LIABLE TO BE DEDUCTED IN TERMS OF SECTION 194J OF THE ACT:- 1. CIT VS. GRANT MEDICAL FOUNDATION , 375 ITR 049 2. CIT (TDS) V. APOLLO HOSPITALS INTERNATIONAL LTD ., ,359 ITR 78 (GUJ) 3. CIT VS. MANIPAL HEALTH SYSTEM LIMITED, 375 ITR 509(KAR). 4. CIT(TDS) VS. YASHODA SUPER SPECIALITY HOSPITAL , 365 ITR 356(AP) 8 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. 4. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS REFERRED TO THE REASONING ADVANCED BY THE LOWER AUT HORITIES IN THEIR RESPECTIVE ORDERS, WHICH WE HAVE ALREADY ADVERTED TO IN THE EARLIER PART OF THIS ORDER AND IS NOT BEING REPEATED FOR THE SAK E OF BREVITY. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CRUX OF THE CONTROVERSY IS AS TO WHETHER AS PER THE TERMS O F AGREEMENT WITH THE FTCS DOCTORS, THE TAX WAS LIABLE TO BE DEDUCTED AS PER SECTION 194J OF THE ACT OR AS PER SECTION 192 OF THE ACT. THE CASE SET UP BY THE REVENUE IS THAT THE TERMS OF APPOINTMENT OF THE FTCS DOCTOR S REFLECTS THAT THERE IS A RELATIONSHIP OF EMPLOYER-EMPLOYEE BETWEEN ASSE SSEE AND THE DOCTORS AND, THEREFORE, TAX IS LIABLE TO BE DEDUCTE D UNDER SECTION 192 OF THE ACT. ON THE OTHER HAND, THE CASE SET UP BY TH E ASSESSEE IS THAT THE TERMS OF AGREEMENT WITH FTCS DOCTORS SHOW THAT IT I S A CASE OF PAYMENT OF PROFESSIONAL FEE FOR PROCURING INDEPEND ENT SERVICES AND, THUS, LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER S ECTION 194J OF THE ACT. THE AFORESAID DISCUSSION WOULD SHOW THAT THE ENTIRE CONTROVERSY HINGES ON THE APPRECIATION OF THE VARIOUS TERMS AND CONDI TIONS OF THE APPOINTMENT OF THE IMPUGNED FTCS DOCTORS. 6. IN THE CONTEXT OF THE PRESENT CONTROVERSY, IT IS QUITE EVIDENT THAT THE DOCTORS HAVE BEEN EMPLOYED BY THE ASSESSEE IN T ERMS OF THEIR RESPECTIVE CONTRACTS. IT IS ALSO QUITE EVIDENT THA T THE REMUNERATION PAYABLE TO FTCS DOCTORS VARY FROM MONTH TO MONTH, WHICH IS DIRECTLY LINKED TO THE NUMBER OF PATIENTS ATTENDED TO BY THE CONCERNED DOCTOR. NO DOUBT IN THE CASE OF SOME OF THE DOCTORS THERE IS AN ELEMENT OF REMUNERATION WHICH IS FIXED PER MONTH BUT ALONGWITH SUCH AMOUNT THERE IS ALSO A CLAUSE WHICH ENVISAGES SHARING OF F EES WITH THE HOSPITAL. 9 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. APART FROM THE FIXED AMOUNT, THE DOCTORS ARE ALSO P AID ON A CASE TO CASE BASIS. IT IS ALSO QUITE EVIDENT THAT ONCE THE FEES ARE COLLECTED FROM THE PATIENTS ATTENDED BY A PARTICULAR CONSULTANT, T HE ASSESSEE HOSPITAL DEDUCTS ITS SHARE AND ONLY THEREAFTER THE AMOUNT IS PAID TO THE CONSULTANTS. OSTENSIBLY, THERE ARE RESTRICTIONS PL ACED ON THE FTCS DOCTORS, WHEREBY THEY ARE NOT ENTITLED TO RENDER SE RVICES TO A COMPETING HOSPITAL. THE AFORESAID HAS BEEN EMPHASI ZED BY THE REVENUE TO SAY THAT THERE IS AN EMPLOYER-EMPLOYEE R ELATIONSHIP. IN OUR CONSIDERED OPINION, THE PRESENCE OF SUCH A CLAUSE I TSELF SHOWS THAT THE FTCS DOCTORS HAVE BEEN CONSIDERED AS INDEPENDENT CO NSULTANTS. THE AFORESAID CLAUSE SEEKS TO ONLY ENSURE THAT THE BUSI NESS OF THE ASSESSEE IS PROTECTED FROM COMPETITION. FURTHERMORE, IT H AS BEEN EMPHASIZED BY THE REVENUE THAT IF THE FTCS DOCTOR IS TO GO ON LEAVE OR TO REMAIN ABSENT HE HAS TO PRE-INFORM THE ASSESSEE HOSPITAL. BEFORE THE LOWER AUTHORITIES, ASSESSEE EXPLAINED THAT THIS RESTRICTI ON WAS PUT SO THAT ALTERNATE ARRANGEMENT COULD BE MADE IN THE ABSENCE OF THE DOCTOR BECAUSE THE ASSESSEE HOSPITAL IS LIABLE TO MAINTAIN THE TIMINGS AND REGULARITY IN ATTENDING PATIENTS. 7. BE THAT AS IT MAY, IN OUR VIEW, THE CONTRACT AGR EEMENTS WITH FTCS DOCTORS HAVE TO BE READ AS A WHOLE AND IN THE BACKG ROUND OF THE PURPOSE FOR WHICH IT HAS BEEN ENTERED INTO. PRIMAR ILY, THE AGREEMENTS ENVISAGE ENGAGEMENT OF THE EXPERTISE AND SKILL OF THE DOCTORS WHICH WOULD BE UTILIZED BY THE ASSESSEE HOSPITAL IN RENDE RING SERVICES TO ITS PATIENTS. FACTUALLY SPEAKING, THE TERMS OF AGREEME NT DO NOT SHOW THAT SUCH DOCTORS WERE TREATED BY THE ASSESSEE AS REGULA R EMPLOYEES BECAUSE THE EMPLOYEE-BENEFITS LIKE PROVIDENT FUND, SUPERANNUATION 10 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. BENEFITS, LEAVE ENCASHMENT, ETC. WERE NOT EXTENDED TO THEM. AT THIS STAGE WE MAY ALSO REFER TO A SOMEWHAT SIMILAR SITUA TION CONSIDERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GRANT MEDICAL FOUNDATION (SUPRA). IN THE SAID CASE ALSO, THE ASSE SSEE HOSPITAL HAD ENGAGED DOCTORS FOR A TENURE ON A VARIABLE REMUNER ATION. THE ASSESSING OFFICER INTERPRETED THE CONDITIONS OF ENG AGEMENT AS TO MEAN THAT THERE WAS AN EMPLOYER- EMPLOYEE RELATIONSHIP, WHEREAS ASSESSEE HAD CONTENDED THAT IT WAS A CASE OF PAYMENT OF PROF ESSIONAL FEE. THE FOLLOWING DISCUSSION IN THE ORDER OF THE HONBLE HI GH COURT IS WORTH OF NOTICE:- 37. IN RELATION TO OTHER CATEGORY OF DOCTORS THER E WAS A DISPUTE. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED THAT THOUGH THESE CATEGORIE S OF DOCTORS HAD A FIXED REMUNERATION AND VARIABLE PAY BUT THEIR TERMS AND CONDITIONS OF EMPLOYMENT OR SERVICE WOULD BE CRUCIA L AND MATERIAL. IN RELATION TO TWO DOCTORS, NAMELY, DR. Z IRPE AND DR. PHADKE, THE CONTRACTS WERE TAKEN AS SAMPLE AND SCRU TINISED MINUTELY. UPON SUCH A SCRUTINY, THE TRIBUNAL NOTED THAT IT CANNOT BE SAID THAT THESE DOCTORS WERE EMPLOYEES. I F THE FIRST PART OF THE COMMISSIONER OF INCOME- TAX (APPEALS) O RDER INDICATES AS TO HOW THESE PERSONS OR DOCTORS WERE N OT TREATED BY THE ASSESSEE AS REGULAR EMPLOYEES FOR WANT OF BE NEFITS LIKE PROVIDENT FUND, RETIREMENTAL BENEFIT, ETC., THEN ME RELY BECAUSE THEY ARE REQUIRED TO SPEND CERTAIN FIXED TIME AT TH E HOSPITAL, TREATING FIXED NUMBER OF PATIENTS AT THE HOSPITAL, ATTEND THEM AS OUT PATIENTS AND INDOOR PATIENTS DOES NOT MEAN THAT A EMPLOYER-EMPLOYEE RELATIONSHIP CAN BE CULLED OUT OR INFERRED. WE DO NOT SEE HOW MR. GUPTA CAN FAULT SUCH CONCLUSI ONS BY RELYING UPON THE DECISIONS, WHICH HAVE BEEN RENDERE D IN THE CASES OF DOCTORS HAVING A FIXED PAY AND TENURE. IN THAT CASE, BEFORE US, THERE IS NO DISPUTE. EVEN THE ASSESSEE A CCEPTS THE POSITION THAT THEY ARE THE EMPLOYEES OF THE ASSESSE E-TRUST. 38. HOWEVER, IN CASES OF OTHER DOCTORS THE CONTRAC T WOULD HAVE TO BE READ AS A WHOLE. IT WOULD HAVE TO BE REA D IN THE BACKDROP OF THE RELATIONSHIP AND WHICH WAS OF ENGAG EMENT PURPOSE AND TIME. THE SKILL OF THE DOCTORS AND THEI R EXPERTISE WERE THE FOUNDATION ON WHICH AN INVITATION WAS EXTE NDED TO 11 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. THEM TO BECOME PART OF THE ASSESSEE WHICH IS A PUBL IC CHARITABLE TRUST AND RENDERING MEDICAL SERVICE. IF WELL KNOWN DOCTORS AND IN SPECIFIED FIELDS ARE INVITED TO JOIN SUCH HOSPITALS FOR A FEE OR HONORARIUM AND THERE ARE CERTAIN TERMS DRAWN SO AS TO UNDERSTAND THE RELATIONSHIP, THEN IN EVERY CASE SUCH TERMS AND THE ATTENDANT CIRCUMSTANCES WOULD HAVE TO BE SE EN AND IN THEIR ENTIRETY BEFORE ARRIVING AT A CONCLUSION THAT THERE EXISTS A EMPLOYER-EMPLOYEE RELATIONSHIP. THE TRIBUNAL FOUND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS IN ERROR. WE ALSO AGREE WITH THE TRIBUNAL BECAUSE IN THE COMMISSIONER OF INCOME TAX (APPEALS) ORDER IN RELATION TO THESE TWO DOCTOR S THE FINDINGS ARE LITTLE CURIOUS. THE COMMISSIONER OF INCOME TAX (APPEALS) REFERRED TO THE TESTS IN PARAGRAPH 9 OF THE ORDER A T RUNNING PAGE 62 AND AT INTERNAL PAGE 14 IN PARAGRAPH 10 THE COMM ISSIONER OF INCOME TAX (APPEALS) CONCLUDED THAT THE DOCTORS DRAWING FIXED REMUNERATION ARE FULL TIME EMPLOYEES. HOWEVER , IN RELATION TO THE SECOND CATEGORY OF DOCTORS DRAWING FIXED PLU S VARIABLE PAY WITH WRITTEN CONTRACTS, THE TERMS AND CONDITION S OF DR. ZIRPE AND DR. PHADKE HAVE BEEN REFERRED AND THE TRIBUNAL CONCLUDED THAT NEITHER OF THE DOCTORS WAS ENTITLED TO PROVIDE NT FUND OR ANY TERMINAL BENEFITS. BOTH WERE FREE TO CARRY ON THEIR PRIVATE PRACTICE AT THEIR OWN CLINIC OR OUTSIDE HOSPITALS B UT BEYOND THE HOSPITAL TIMINGS. BOTH DOCTORS TREATED THEIR PRIVAT E PATIENTS FROM THE HOSPITAL PREMISES. ALL OF WHICH COULD BE SEEN A S INDICATORS THAT THEY WERE NOT EMPLOYEES BUT INDEPENDENT PROFES SIONALS (SEE PARAGRAPH 14). HOWEVER, THEY WERE FOUND TO BE SHARING A OVERWHELMING NUMBER OF ATTRIBUTES OF EMPLOYEES. IN RELATION TO THAT THE CONTRACT SEEMS TO HAVE BEEN BIFURCATED OR SPLIT UP OR READ IN BITS AND PIECES BY THE COMMISSIONER OF INCO ME-TAX (APPEALS). THE LEAVE RULES WERE HELD TO BE APPLICAB LE IN THE CASE OF DR. PHADKE AND THERE WERE FIXED TIMING AND FIXED REMUNERATION. NOW, IT IS INCONCEIVABLE THAT MERELY BECAUSE FOR A CERTAIN PERIOD 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 PATIENTS AT IT N ECESSARILY. THE ANXIETY APPEARS IS NOT TO INCONVENIENCE THE PATIENT S VISITING AND SEEKING TREATMENT AT THE RUBY HALL CLINIC. IF SPECI ALISED TEAM OF DOCTORS, EXPERTS AND EXPERIENCED IN THE FIELD ARE P ART OF THE ASSESSEE'S CLINIC, THEN THEIR AVAILABILITY AT THE C LINIC HAS TO BE ENSURED. NOW, THE TREND IS TO PROVIDE ALL FACILITIE S UNDER ONE ROOF SO THAT PATIENTS ARE NOT COMPELLED TO GO TO SEVERAL CLINICS OR HOSPITALS. HENCE, A DIAGNOSTIC CENTRE WITH LABORATO RIES AND CLINICS, CONSULTATION ROOMS, ROOMS WITH BEDS FOR IN DOOR TREATMENT, CRITICAL CARE, TREATMENT FOR KIDNEY, LEV ER, HEART, BRAIN, STOMACH AILMENTS ARE FACILITIES AVAILABLE AT CLINIC S AND HOSPITALS. THE MANAGEMENT, THEREFORE, INSISTS THAT SUCH FACILITIES, WHICH ARE VERY COSTLY AND EXPENSIVE ARE UTILISED TO THE OPTIMUM AND THE INVESTMENT OF TIME, MONEY AND INFRA STRUCTURE IS NOT WASTED. HENCE, FIXED TIMINGS AND REQUIRED NU MBER OF 12 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. HOURS AND SUCH STIPULATIONS ARE INCORPORATED IN CON TRACTS SO THAT THEY ARE OF BINDING NATURE. THE DOCTOR OR EXPE RT MEDICAL PRACTITIONER IS THEN OBLIGED TO DENOTE HIS TIME AND ENERGY TO THE CLINIC WHOLE HEARTEDLY. IF HANDSOME REMUNERATION, F EE IS PRESCRIBED IN RETURN OF READYMADE FACILITIES EVEN F OR PROFESSIONALS, THEN SUCH INSISTENCE IS NOT NECESSAR ILY TO TREAT HIGHLY QUALIFIED PROFESSIONALS AS SERVANTS. IT IS A RELATIONSHIP OF MUTUAL TRUST AND CONFIDENCE FOR THE LARGER INTEREST OF THE PATIENT BEING SERVED EFFICIENTLY. FROM THIS CONTRACT OR ANY CLAUSE THEREIN NO SUCH CONCLUSION COULD HAVE BEEN ARRIVED AT. WE D O NOT SEE HOW THERE WAS ANY EXPRESS BAR FROM WORKING AT ANY O THER HOSPITAL AND IF THE CONTRACTS WOULD HAVE BEEN PROPE RLY AND CAREFULLY SCRUTINISED. MERELY BECAUSE THEIR INCOME FROM THE HOSPITAL IS SUBSTANTIAL DOES NOT MEAN THAT TEN OUT OF THE FOURTEEN CRITERIA EVOLVED BY THE COMMISSIONER OF IN COME-TAX (APPEALS) HAVE BEEN SATISFIED. THE ASSESSING OFFICE R AND THE COMMISSIONER OF INCOME-TAX (APPEALS), THEREFORE, WE RE IN COMPLETE ERROR. WE HAVE ALSO PERUSED THESE CONTRACT S AND COPIES OF WHICH ARE ANNEXED TO THE PAPER BOOK BEING PART OF THE ORDER OF THE ASSESSING OFFICER. WE FIND THAT THE CO MMUNICATIONS WHICH HAVE BEEN RELIED UPON, NAMELY, NOVEMBER 25, 2 008, AND MAY 14, 2009, DO NOT CONTAIN ANY ADMISSION BY THE A SSESSEE. 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 FIN D THAT ANY STIPULATIONS REGARDING WORKING HOURS, ACADEMIC LEAV E OR ATTACHMENTS WOULD REVEAL THAT THESE DOCTORS ARE EMP LOYEES OF THE ASSESSEE. IN FACT, DR. ZIRPE WAS APPOINTED 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 PERMITTED TO ENGAGE HIMSELF IN ANY HOS PITAL OR NURSING HOME ON PAY OR EMOLUMENTS CANNOT BE SEEN AS AN ISOLATED TERM OR STIPULATION. IN THE CASE OF DR. UD AY PHADKE, WE DO NOT FIND ANY SUCH STIPULATION. IN THESE CIRCUMST ANCES, THE ONLY AGREEMENT BETWEEN THE PARTIES BEING THAT CERTA IN PRIVATE PATIENTS OR FIXED OR SPECIFIED NUMBER SEEN BY THE C ONSULTANT COULD BE ADMITTED TO THE ASSESSEE-HOSPITAL. THAT WO ULD NOT DENOTE A BINDING RELATIONSHIP OR A MASTER-SERVANT A RRANGEMENT. A ATTRACTIVE OR BETTER TERM TO ATTRACT TALENTED YOU NG PROFESSIONALS AND TOO IN A COMPETITIVE WORLD WOULD NOT MEAN TYING DOWN THE PERSON OR RESTRICTING HIS POTENTIAL TO ONE SET UP ONLY. THE ARRANGEMENT MUST BE LOOKED IN ITS ENTIRET Y AND ON THE TOUCH STONE OF SETTLED PRINCIPLES. THE TRIBUNAL WAS RIGHT IN REVERSING THE FINDINGS OF THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TAX (APPEALS). THERE WAS A C LEAR PERVERSITY AND CONTRADICTION IN THE FINDINGS, PARTI CULARLY POINTED OUT BY US HEREINABOVE. 13 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. 39. IN RELATION TO OTHER DOCTORS WHERE THE REMUNERA TION WAS VARIABLE AND THERE WAS A WRITTEN CONTRACT OR NO WRI TTEN CONTRACT THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TR IBUNAL DID NOT COMMIT ANY ERROR AT ALL. BOTH HAVE REFERRED EXT ENSIVELY TO THE MATERIALS ON RECORD. WE ARE NOT IN AGREEMENT WI TH MR. GUPTA THAT THE TRIBUNAL'S ORDER IS IN ANY WAY INCOM PLETE OR SKETCHY OR CRYPTIC. THE SETTLED PRINCIPLES AND REND ERED IN CO- ORDINATE BENCH DECISIONS HAVE BEEN REFERRED ONLY TO EMPHASISE THE TESTS, WHICH HAVE BEEN EVOLVED FROM TIME TO TIM E. IT IS ONLY IN THE LIGHT OF SUCH TESTS AND THEIR APPLICABILITY TO INDIVIDUAL CASES THAT MATTERS OF THIS NATURE MUST BEDECIDED. THIS APPROACH OF THE TRIBUNAL DID NOT REQUIRE IT TO REND ER ELABORATE OR LENGTHY FINDINGS AND WHEN IT AGREED WITH THE COMMIS SIONER OF INCOME-TAX (APPEALS). WE DO NOT FIND EVEN IN THE CA SE OF DR. SUMIT BASU THE COMMISSIONER OF INCOME-TAX (APPEALS) OR THE TRIBUNAL COMMITTED ANY ERROR. MERELY BECAUSE OF HIS STATURE HE WAS ENSURED AND GUARANTEED A FIXED MONTHLY PAYMENT. THAT WOULD NOT MAKE HIM AN EMPLOYEE OF THE HOSPITAL. THI S CANNOT BE SEEN AS A STAND ALONE TERM. THERE ARE OTHER TERM S AND CONDITIONS BASED ON WHICH THE ENTIRE RELATIONSHIP O F A CONSULTANT OR PROFESSIONAL AND VISITING THE ASSESSE E'S HOSPITAL HAD BEEN DETERMINED. ONCE AGAIN, NO GENERAL RULE CA N BE LAID DOWN. NOWADAYS, PRIVATE MEDICAL CARE HAS BECOME IMP ERATIVE. PUBLIC HOSPITALS CANNOT CATER TO THE INCREASING POP ULATION. HENCE, PRIVATE HOSPITALS ARE ESTABLISHED AND CONTIN UE TO BE FORMED AND SET UP DAY-BY-DAY. THE QUALITY OF CARE, SERVICE, ATTENTION, ON ACCOUNT OF THE FINANCIAL CAPACITY THE REIN HAS FORCED PEOPLE OF ORDINARY MEANS ALSO TO VISIT THEM. SINCE SPECIALISTS ARE IN DEMAND BECAUSE OF THE LIFE STYLE DISEASES TH AT CONSULTANTS AND DOCTORS PREFER THESE HOSPITALS. SOM ETIMES THEY HOP FROM ONE MEDICAL CENTRE OR CLINIC TO ANOTHER TH ROUGHOUT THE DAY. RETAINING THEM FOR FIXED DAYS AND SPECIFIED HO URS REQUIRES OFFERING THEM FRIENDLY TERMS AND CONDITIONS. IN SUC H CIRCUMSTANCES, WE DO NOT THINK THAT THE TRIBUNAL CO MMITTED ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD IN CONFIRMING THE FINDINGS RENDERED BY THE FIRST APPELLATE AUTHORITY. THE FINDINGS OF FACT FROM PARAGRAPH 16 ONWARDS IN THE COMMISSION ER OF INCOME-TAX (APPEALS) ORDER ON GROUND NO. 2 AND FROM PARAGRAPH 20 ONWARDS ON GROUND NO. 3 DO NOT SUFFER FROM ANY S ERIOUS LEGAL INFIRMITY. THE APPRECIATION AND APPRAISAL OF THE FACTUAL MATERIALS IS NOT SUCH AS WOULD ENABLE US TO INTERFE RE IN OUR LIMITED JURISDICTION. OUR FURTHER APPELLATE JURISDI CTION 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 RELIED ON THE JUDGMENTS WHICH WERE RENDERED IN CASES WHERE THE TERMS AND CONDITIONS DENOTING EMPLOYEE AN D EMPLOYER RELATIONSHIP INCLUDED A FIXED PAY OR MONTH LY REMUNERATION ONLY. FOR ALL THESE REASONS WE ARE OF THE OPINION 14 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. THAT THE QUESTIONS OF LAW TERMED AS SUBSTANTIAL AND FRAMED AS ABOVE WOULD HAVE TO BE ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 8. SIMILARLY, THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANIPAL HEALTH SYSTEM LIMITED(SUPRA) HAS HELD AS UN DER:- 13. TO DECIDE THE RELATIONSHIP OF EMPLOYER AND EMPL OYEE WE HAVE TO EXAMINE WHETHER THE CONTRACT ENTERED INTO B ETWEEN THE PARTIES IS A 'CONTRACT FOR SERVICE' OR A 'CONTRACT OF SERVICE'. THERE ARE MULTI-FACTOR TESTS TO DECIDE THIS QUESTION. IND EPENDENCE TEST, CONTROL TEST, INTENTION TEST ARE SOME OF THE TESTS NORMALLY ADOPTED TO DISTINGUISH BETWEEN 'CONTRACT FOR SERVIC E' AND 'CONTRACT OF SERVICE'. FINALLY, IT DEPENDS ON THE P ROVISIONS OF THE CONTRACT. INTENTION ALSO PLAYS A ROLE IN DECIDING T HE FACTOR OF CONTRACT. THE INTENTION OF THE PARTIES CAN ALSO DET ERMINE OR ALTER A CONTRACT FROM ITS ORIGINAL SHAPE AND STATUS BOTH PARTIES HAVE MUTUAL AGREEMENT. 9. THE AFORESAID JUDGMENTS REINFORCE THE PROPOSITIO N THAT THE ISSUE IS LIABLE TO BE DECIDED ON PROPER APPRECIATION OF T HE TERMS OF AGREEMENT BETWEEN THE ASSESSEE AND THE FTCS DOCTORS . WE HAVE PERUSED THE TERMS AND CONDITIONS OF THE AGREEMENT A ND NOTE THAT THE FTCS DOCTORS ARE ENTITLED TO ADMIT, INVESTIGATE AND PROVIDE TREATMENT TO PATIENTS AND THAT THE DOCTORS WOULD BE RESPONSIB LE FOR THEIR CLINICAL CARE. THE DOCTOR IS RESPONSIBLE FOR SUPERVISING TH E SUBORDINATE STAFF, WHEREAS THE FACILITIES OF THE HOSPITAL STAFF, PARAM EDICAL AND NURSING STAFF IS PROVIDED BY THE HOSPITAL ALONGWITH THE NECESSARY EQUIPMENT TO RENDER THE SERVICES TO THE PATIENTS. IT IS FURTHER PROVIDED THAT 15% OF THE FEE COLLECTED BY THE FTCS DOCTORS IS DEDUCTED B Y THE HOSPITAL AS ITS SHARE AND THE BALANCE 85% IS PAID TO THE DOCTOR AFT ER DEDUCTION OF TAX AT SOURCE. IT IS SPECIFICALLY PROVIDED THAT IN TH E EVENT OF NON-PAYMENT OF FEE BY THE PATIENTS, IT SHALL BE THE RESPONSIBIL ITY OF THE CONCERNED 15 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. DOCTORS. QUITE CLEARLY, THE ARRANGEMENT BETWEEN TH E ASSESSEE HOSPITAL AND THE FTCS DOCTORS SHOW THAT THE EARNINGS OF THE DOCTORS ARE DEPENDENT ON THE PATIENTS COMING TO THE HOSPITAL. THE MORE PATIENTS ARE ATTENDED TO BY THE DOCTOR, MORE THE REVENUE IN THE HANDS OF THE DOCTOR. IN SUCH A SITUATION, IN OUR VIEW, THE FTCS DOCTORS CANNOT BE CONSTRUED AS EMPLOYEES OF THE ASSESSEE HOSPITAL BUT ARE INDEPENDENT CONSULTANTS, WHO UNDERTAKE RISK AND REWARD OF THEIR MEDICAL PROFESSION. MERE PRESENCE OF A CLAUSE PROHIBITIN G RENDERING OF SERVICE TO COMPETING HOSPITAL WOULD NOT ALTER THE NATURE OF PROFESSIONAL SERVICES RENDERED BY THE FTCS DOCTORS. EVEN OTHER CONDITIONS POINTED OUT BY THE REVENUE, NAMELY REPORTING OF ABSENCE AND OBSERVATION OF ETHICAL CONDUCT, ETC. DO NOT SHOW THAT THE RENDERIN G OF INDEPENDENT SERVICES BY SUCH CONSULTANTS ARE COMPROMISED. QUITE CLEARLY, SUCH RESTRICTIONS ARE PLACED BY THE ASSESSEE HOSPITAL FO R FACILITATING TIMELY AND PROPER SERVICES TO THE CLIENTS. THERE ARE N O EMPLOYEE BENEFITS EXTENDED TO THE CONSULTANTS, NAMELY GRATUITY, PROVI DENT FUND, LEAVE ENCASHMENT, ETC. 10. AT THE TIME OF HEARING THE LD. REPRESENTATIVE F OR THE ASSESSEE ALSO MADE A STATEMENT AT BAR THAT THE RECIPIENT FTC S DOCTORS HAVE FILED THEIR INDIVIDUAL RETURNS OF INCOME SHOWING THE INC OME RECEIVED FROM THE ASSESSEE AS PROFESSIONAL INCOME, AND THE SAME H AS BEEN ACCEPTED BY THE DEPARTMENT. THERE IS NO CONTRAVENTION BY TH E REVENUE TO THE AFORESAID. 11. CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTA NCES EMERGING FROM THE MATERIAL ON RECORD, WE HOLD THAT THE PAYME NTS MADE TO THE FTCS DOCTORS ARE IN THE NATURE OF PROFESSIONAL FEE S LIABLE FOR DEDUCTION 16 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. OF TAX AT SOURCE IN TERMS OF SECTION 194J OF THE AC T AND THAT THERE DOES NOT EXIST ANY EMPLOYER-EMPLOYEE RELATIONSHIP SO AS TO INVOKE THE PROVISIONS OF SECTION 192 OF THE ACT. CONSEQUENTLY , ON THIS ASPECT ASSESSEE HAS TO SUCCEED. 12. BEFORE PARTING, WE MAY REFER TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ST.STEPHENS HOSPITAL VS. DCIT, 6 SOT 60 (DEL), WHICH HAS BEEN RELIED UPON BY THE REVENUE BEFORE US . WE HAVE PERUSED THE SAID DECISION AND FIND THAT THE SAME IS INAPPLICABLE TO THE FACTS BEFORE US. IN THE CASE OF ST. STEPHENS HOSPI TAL (SUPRA) THE PAYMENTS MADE TO THE DOCTORS WERE TERMED AS SALARY AND IN TERMS OF THE FACT-SITUATION THEREIN, THE PAYMENTS WERE HELD LIABLE FOR TAX DEDUCTION OF AT SOURCE UNDER SECTION 192 OF THE ACT . FACTUALLY SPEAKING, IN THE PRESENT CASE ON THE BASIS OF THE READING OF THE TERMS OF AGREEMENT WITH FTCS DOCTORS AND IN THE LIGHT OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GRANT MEDI CAL FOUNDATION (SUPRA), IT HAS TO BE HELD THAT NO EMPLOYER-EMPL OYEE RELATIONSHIP SUBSIST BETWEEN ASSESSEE HOSPITAL AND THE FTCS DOC TORS. 13. IN THE RESULT, WE THEREFORE, HOLD THAT LOWER AU THORITIES HAVE ERRED IN TREATING THE ASSESSEE AS AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 201(1) OF THE ACT QUA THE PAYMENT OF PROFE SSIONAL FEE TO FTCS DOCTORS. AS A CONSEQUENCE, WE THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL T HE LEVY OF DEMAND UNDER SECTION 201(1) OF THE ACT AND ALSO THE CORRES PONDING INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT FOR ASSESS MENT YEAR 2008-09. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 17 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. 14. THE ONLY OTHER GROUND RAISED BY THE ASSESSEE IN ITS APPEAL FOR A.Y 2008-09 IS NON-GRANTING OF FULL RELIEF UNDER SECTIO N 201(1) OF THE ACT FOLLOWING THE RATIO OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO-COLA BEVERAGE (P) LTD. VS. CIT, 293 ITR 226(SC). THE AFORESAID GROUND OF APPEAL IS ONLY AN ALTERNATE GRO UND AND SINCE WE HAVE ALREADY HELD THAT THE PAYMENT MADE TO FTCS DOC TORS IS LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SECTION 194J OF TH E ACT AND NOT UNDER SECTION 192 OF THE ACT, THE SAID GROUND OF APPEAL I S RENDERED FRUCTUOUS. THE SAME IS ACCORDINGLY DISMISSED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A SSESSMENT YEAR 2008-09 IS ALLOWED, AS ABOVE. 16. NOW WE MAY TAKE UP THE CROSS APPEAL OF THE REVE NUE VIDE ITA NO.7051/MUM/2012 FOR ASSESSMENT YEAR 2008-09, WHERE IN THE FIRST ISSUE RELATES TO THE PAYMENT MADE BY THE ASSESSEE T OWARDS ANNUAL MAINTENANCE OF THE MACHINERIES. THE ASSESSEE COMPA NY HAD DEDUCTED TAX ON SUCH PAYMENTS IN TERMS OF SECTION 194C OF TH E ACT ON THE GROUND THAT PAYMENTS WERE MADE TO CONTRACTORS FOR CARRYIN G ON WORK. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT TAX WAS LIABLE TO BE DEDUCTED ON SUCH PAYMENTS UNDER SECTION 194J OF THE ACT AS THE PAYMENTS WERE FOR RENDERING TECHNICAL SERVICES. AS A CONSEQUENCE, THE ASSESSING OFFICER HELD THE ASSESSEE AS AN ASSESSEE IN DEFAULT WITHIN THE MEANING OF SECTION 201(1) OF THE ACT AND SUCH SHORT FALL WAS DETERMINED AT RS.3,25,569/- AND THE RELATED INTEREST CHARGEAB LE UNDER SECTION 201(1A) OF THE ACT WAS DETERMINED AT RS. 1,56,273/- 18 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. 16. ON THIS ASPECT, CIT(A) HAS ACCEPTED THE STAND O F THE ASSESSEE THAT PAYMENTS IN TERMS OF THE CONTRACT FOR ANNUAL MAINTE NANCE OF THE MACHINES WAS LIABLE TO BE SUBJECT TO DEDUCTION OF T AX AT SOURCE UNDER SECTION 194C OF THE ACT. ACCORDINGLY, REVENUE IS I N APPEAL BEFORE US. 17. ANOTHER ASPECT RAISED IN THE APPEAL OF THE REVE NUE IS WITH REGARD TO THE TAX DEDUCTIBLE AT SOURCE ON PAYMENTS MADE FO R PEST CONTROL EXPENSES. THE ASSESSEE DEDUCTED TAX AT SOURCE ON S UCH PAYMENTS BY INVOKING SECTION 194C OF THE ACT, WHEREAS THE ASSES SING OFFICER HELD THAT THE TAX WAS LIABLE TO BE DEDUCTED UNDER SECTIO N 194J OF THE ACT. THE ASSESSEE WAS HELD AS AN ASSESSEE IN DEFAULT UN DER SECTION 201(1) OF THE ACT ON THIS ASPECT AND THE INTEREST CHARGEABLE UNDER SECTION 201(1A) WAS DETERMINED AT RS.52,377/- AND RS.25,14 1/- RESPECTIVELY. ON THIS ASPECT ALSO THE CIT(A) CONCURRED WITH THE A SSESSEE AND ACCORDINGLY THE REVENUE IS IN APPEAL BEFORE US. 18. WITH RESPECT TO THE PAYMENTS MADE TOWARDS ANNUA L MAINTENANCE CONTRACT, WE FIND THAT THE CIT(A) UPHELD THE STAND OF THE ASSESSEE FOLLOWING THE CBDT CIRCULAR NO.715 DATED 8/8/1995 A S ALSO THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF NUCLEAR POWER CORPORATION LTD., ITA NO.3059 TO 3061/AHD/2009 DATE D 30/9/2011. THE FOLLOWING DISCUSSION IN THE ORDER OF CIT(A) IS WORTHY OF NOTICE:- 4.4 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE O BSERVATIONS OF THE AO AS PER THE IMPUGNED ORDER PASSED BY HIM. THE DETAILS OF EX PENSES UNDER THIS HEAD SHOW THAT THEY ARE TOWARDS ANNUAL MAINTENANCE CONTR ACTS (AMC) OF MEDICAL EQUIPMENTS MACHINES ETC. THE AMCS ARE CONTRACTS FOR PERIODICAL INSPECTION AND ROUTINE MAINTENANCE WORK ALONG-WITH SUPPLY OF S PARE PARTS AND IN MY VIEW DO NOT CONSTITUTE 'FEES FOR TECHNICAL SERVICES '. ALSO, IN MY VIEW, THE REPAIRS OF OTHER GADGETS SUCH ACS ETC ARE ALSO IN T HE NATURE OF NORMAL REPAIRS 19 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. AS MENTIONED IN Q.29 OF CIRCULAR NO.715 DATED 8.8.1 995 ISSUED BY CBDT WHICH IS AS UNDER: 'QUESTION 29: WHETHER A MAINTENANCE CONTRACT INCLUD ING SUPPLY OF SPARES WOULD BE COVERED UNDER SECTION 194C OR 194J OF THE ACT? ANSWER: ROUTINE) NORMAL MAINTENANCE CONTRACTS WHICH INCLUDES SUPPLY OF SPARES WILL BE COVERED UNDER SECTION 194C. HOWEVER) WHERE TECHNICAL SERVICES ARE RENDERED) THE PROVISION OF SECTION 194 J WILL APPLY IN REGARD TO TAX DEDUCTION AT SOURCE.' 4.5 THE APPELLANT'S CLAIM IS ALSO SUPPORTED BY THE DECISION OF IT AT, AHMEDABAD IN THE CASE OF GUJARAT STATE ELECTRICITY CORPORATION LTD. VS. ITO, 3 SOT 468 (AHD) WHEREIN IT WAS HELD THAT 'THE PAYMENT S MADE BY THE ASSESSEE COMPANY TO GUJARAT ELECTRICITY BOARD FOR ENTIRE OPE RATION AND MAINTENANCE OF POWER PLANT UNDER A COMPREHENSIVE CONTRACT COULD NOT BE TREATED AS PAYMENT OF FEES FOR PROFESSIONAL SERVICES AS CONTEM PLATED IN SECTION 194J BUT WERE COVERED BY SECTION 194C OF THE ACT. FURTHER, I N THE RECENT DECISION DATED 30.09.2011 IN ITA NOS. 3059 TO 3061 & 3081/AH D. 2009 OF AHMEDABAD TRIBUNAL IN THE CASE OF NUCLEAR POWER CORPORATION L TD., IT HAS BEEN HELD THAT REPAIRS AND ANNUAL MAINTENANCE OF COMPUTERS DO NOT INVOLVE SERVICES OF TECHNICAL NATURE SO AS TO BE ASSESSABLE AS 'FEES FO R TECHNICAL SERVICES' U/S 9(1)(VII) OF THE ACT AND HENCE THE ASSESSEE WAS REQ UIRED TO DEDUCT TDS UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J OF THE ACT. THE HON'B1E ITAT HAS IN THIS REGARD FOLLOWED THE DECISION OF HO N'B1E MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD, 251 ITR 53 (WHERE IT WAS HELD THAT THE INSTALLATION AND OPERATION OF SOPHISTICATED EQU IPMENTS WITH A VIEW TO EARN INCOME BY ALLOWING CUSTOMERS TO AVAIL OF THE B ENEFIT OF THE USER OF SUCH EQUIPMENT DOES NOT RESULT IN THE PROVISION OF TECHN ICAL SERVICE TO THE CUSTOMER FOR A FEE). THE DECISION IN THE CASE OF UL TRA ENTERTAINMENT SOLUTIONS LTD. (SUPRA) CITED BY THE AO IS NOT APPLICABLE TO T HE ISSUE AT HAND BECAUSE IN THAT CASE, THE QUESTION WAS REGARDING THE NATURE OF PAYMENTS MADE BY THE ASSESSEE TO ANOTHER PERSON 'P' WHO WAS ENGAGED BY T HE ASSESSEE IS TO CARRY OUT ALL OPERATIONS CONNECTED WITH THE SELLING OF ON LINE LOTTERY TICKETS ON BEHALF OF THE ASSESSEE. 4.6 IN VIEW OF ABOVE DISCUSSION THEREFORE AND RESPE CTFULLY FOLLOWING THE ABOVE TWO DECISIONS OF HON'BLE AHMEDABAD TRIBUNAL, I HOLD THAT THE EXPENDITURE ON ACCOUNT OF ANNUAL MAINTENANCE CONTRA CTS (AMC) OF MEDICAL- EQUIPMENTS MACHINES ETC. IS NOT IN THE NATURE OF PR OFESSIONAL OR TECHNICAL SERVICES AS CONSTRUED UNDER THE PROVISIONS OF SECTI ON 194J OF THE ACT AND HENCE, PROVISIONS OF SECTION 194J OF THE ACT ARE NO T APPLICABLE. THE APPELLANT HAS CORRECTLY DEDUCTED TDS UNDER SECTION 194C OF TH E ACT IN RESPECT OF 20 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. PAYMENTS ON ANNUAL MAINTENANCE CONTRACTS (AMC) OF M EDICAL EQUIPMENTS MACHINES ETC. ACCORDINGLY, THE DEMANDS OF TAX UNDER SECTION 201(1) AND OF INTEREST UNDER SECTION 201(1A) RAISED BY THE AO IN RESPECT OF THE ASSESSMENT YEARS UNDER CONSIDERATION ARE HEREBY DELETED.' 19. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CI T (A) AND THEREFORE WE HOLD THAT TAX HAS BEEN RIGHTLY DEDUCTED BY AS SESSEE ON THE ANNUAL MAINTENANCE CHARGES U/S 194C OF THE ACT. CONSEQUE NTLY, IT IS HELD THAT THE ASSESSEE CANNOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT' WITHIN THE MEANING OF SECTION 201(1) OF THE ACT. CONSEQUENTLY, NO INTEREST UNDER SECTION 201(1A) OF THE I.T. ACT IS LEVIABLE. ACCORDINGLY, THE ORD ER OF CIT(A) IS AFFIRMED ON THIS POINT. 20. IN RESPECT OF PAYMENT MADE TOWARDS PEST CONTROL CHARGES, THE CIT(A) AGREED WITH THE ASSESSEE THAT SUCH PAYMEN TS ARE COVERED UNDER SECTION 194C OF THE ACT AND NOT UNDER SECTION 194J OF THE ACT. THE FOLLOWING DISCUSSION IN THIS REGARD IN THE ORD ER OF CIT(A) IS RELEVANT 5.4 I HAVE CONSIDERED THE ABOVE SUBMISSION OF THE APPELLANT AND AGREE WITH SAME. I DO AGREE THAT THE MAJOR P ART OF THE COST OF THE MAINTENANCE CONTRACT IS TOWARDS THE COSTLY P ESTICIDES THAT ARE APPLIED AND FOR THE PURPOSE OFF SUCH APPLICATION, ANY HIGH TECHNICAL SKILL OR PROFESSIONAL QUALIFICATION IS NOT REQUIR ED. THE WORK OF PETS CONTROL PROCESS IS REPETITIVE IN NATURE AND THE PERSONS WHO CARRY OUT THE SAME ARE SEMI-SKILLED PERSONS NOT HAVING AND HIGH DEGREE OF PROFESSIONAL QUALIFICATION. HENCE, THE PAYMENTS IN RESPECT OF THE PEST CONTROL CONTRACTS CANNOT BE SAID TO BE COVERED UN DER THE PROVISIONS OF SECTION 194J OF THE ACT. THE APPELLANT HAS RIGHTLY DEDUCTED THE TAX AT SOURCE UNDER SECTION 194C OF THE ACT. THEREFORE TH E DEMANDS OF TAX UNDER SECTION 201(1) AND OF INTEREST U/S 201(1A) RAISED BY AO IN RESPECT OF THE ASSESSMENT YEARS UNDER CONSIDERAT ION ARE HEREBY DELETED. 21. IN OUR VIEW, THE CIT(A) HAS CORRECTLY HELD THAT THE PAYMENT OF PEST CONTROL CHARGES DO NOT INVOLVE RENDERING OF AN Y TECHNICAL SERVICES 21 ASIAN HEART INSTITUTE & RESEARCH CENTRE PVT. LTD. BY THE RECIPIENT AND ACCORDINGLY THE ASSESSEE WAS R IGHT IN DEDUCTING TAX AT SOURCE U/S.194C OF THE ACT. THE ORDER OF THE CI T(A) ON THIS ASPECT IS ALSO AFFIRMED. THUS, IN SO FAR AS THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2008-09 IS CONCERNED THE SAME IS DI SMISSED. 22. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE ISSUES INVOLVED, AND FACTS AND CIRCUMSTANCES IN THE CROSS- APPEALS FOR THE OTHER CAPTIONED ASSESSMENT YEARS ARE SIMILAR TO THOSE CON SIDERED BY US IN THE CROSS-APPEALS FOR ASSESSMENT YEAR 2008-09 IN THE EA RLIER PARAS. THEREFORE, OUR DECISION IN THE APPEALS FOR A.Y 2008 -09 SHALL APPLY MUTATIS MUTANDIS IN OTHER YEARS ALSO. 22. RESULTANTLY, WHEREAS THE APPEALS OF THE ASSESSE E ARE ALLOWED, THOSE OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/09/2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI,DATED ..... /09/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBA I