District Health Society, Hardoi V. Income Tax Officer, Bareilly

ITA 757/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4422 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.757/LKW/2015 ASSESSMENT YEAR 2010-11 INCOME TAX OFFICER (TDS), BAREILLY VS DISTRICT HEALTH SOCIETY, O/O CHIEF MEDICAL OFFICER, DISTRICT HOSPITAL, HARDOI-241001 (RESPONDENT) (APPELLANT) SHRI SANJAY SAXENA, CA APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 06/04/2016 DATE OF HEARING 19/05/2016 DATE OF PRONOUNCEMENT O R D E R PER MAHAVIR PRASAD, JM. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A), BAREILLY DATED 14.10.2015 FOR THE AY 2010-11. 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE IS AS UNDER:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), BAREILLY ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF INTEREST U/S 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 OF RS.9, 69,870/- AS PER ORDER U/S 201(1)/201(1A) OF THE INCOME TAX A CT, 1961 DATED 02.07.2012 PASSED BY THE INCOME TAX OFFICER ( TDS), BAREILLY. 2 3. THE FACTS OF THE CASE ARE THAT DEDUCTOR SOCIETY IS RUNNING NATIONAL RURAL HEALTH MISSION PROJECT UNDER MEDICAL OFFICER, HARDO I. SOCIETY HAS MADE PAYMENT TO VARIOUS PERSONS/CONCERNS FOR SERVICES RENDERED T O PROVIDE MEDICAL FACILITIES IN DISTRICT HARDOI ON BEHALF OF THE CHIEF MEDICAL OFFI CER, DEPARTMENT OF HEALTH. DURING THE COURSE OF VERIFICATION PROCEEDINGS OF TD S PROVISIONS ON 18.10.2011,IT WAS ADMITTED BY THE DEDUCTOR THAT THEY HAVE NOT DED UCTED TDS ON VARIOUS PAYMENTS MADE TO PERSONS ENGAGED IN PROVIDING SERVI CES ON CONTRACT BASIS. THEREFORE, DETAILED INFORMATION WERE CALLED THROUGH SUMMON U/S 131 DATED 18.10.2011 AND AUTHORIZED REPREHENSIVE APPEARED FRO M TIME TO TIME AND FURNISHED A LIST OF CONTRACTUAL PROFESSIONAL AND TE CHNICAL PERSONS ENGAGED BY SOCIETY AND IT HAS PAID HONORARIUM FOR SERVICES AND THEY WERE DEO, PEON, MBBS MO, ANM, STAFF NURSE, ISM LADY LD. DR OF THE REVEN UE ETC. AND WHICH HAS BEEN GATHERED AND INFORMED BY DEDUCTOR VIDE LETTER DATED 17.01.2011 THAT DEDUCTOR TREATED AS PERMANENT EMPLOYEES U/S 192 OF THE ACT F OR DEDUCTION OF TDS FROM PAYMENT MADE TO THEM. THAT ABOVE SAID EMPLOYEES WER E ON CONTRACTUAL BASIS BUT THERE WAS A RELATIONSHIP OF EMPLOYEES AND EMPLOYER AND THEREFORE, THESE EMPLOYEES WERE NOT CONSIDERED BY THE ASSESSEE FOR T DS U/S 194J. OBSERVING THE CONTENT OF CONTRACT NOTE AND ORDER FOR ENGAGEMENT, A LETTER DATED 02.01.2012 WAS SENT TO DEDUCTOR TO EXPLAIN CERTAIN PRE REQUIRE MENTS TO DECIDE THE QUESTION OF TREATMENT AS EMPLOYEE IN SHAPE OF ELEMENT OF EMP LOYER AND EMPLOYEE RELATIONSHIP FOR TDS U/S 192 OR AS PROFESSIONAL AND TECHNICALLY QUALIFIED PERSONS 194J OF THE ACT BECAUSE IT WAS OBVIOUS THAT CERTAIN EMPLOYEES ACTS UNDER DIRECT CONTROL AND SUPERVISION OF MASTERS. HOWEVER, AS AGE NT OR A PROFESSIONAL OR TECHNICAL PERSON EXERCISE HIS DISCRETION IN CARRYIN G OUT THE WORK AND IS NOT UNDER THE DIRECT CONTROL OR SUPERVISION OF THE EMPLOYER T HROUGH HE WAS BOUND BY THE TERMS OF EMPLOYMENT FROM TIME TO TIME. DURING THIS FINANCIAL YEAR, THE DEDUCTOR MADE TOTAL PAYMENT OF RS.76,36,769/-. THUS LOOKING TO THE FACTS OF THE CASE AND PROVISIONS CONTAINED IN SECTION 201(1)/201(1A) THE DEDUCTOR WAS HELD ASSESSEE IN 3 DEFAULT FOR SHORT DEDUCTION OF TDS FROM TOTAL PAYME NT RS.76,36,769/- DURING THE FINANCIAL YEAR UNDER SECTION 194J OF THE ACT. 4. AGGRIEVED ASSESSEE HAS PREFERRED AN APPEAL BEFOR E THE CIT(A) AND CIT(A) HAS REJECTED THE APPEAL OF THE ASSESSEE AND CONFIRM ED THE ORDER OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN FURTHER APPEAL BEFO RE US. 5. LEARNED AR OF THE ASSESSEE SUBMITTED THAT A SAMP LE APPOINTMENT LETTER IS AVAILABLE ON PAGE 8 OF THE PAPER BOOK AND ALL APPOI NTMENTS ARE ON SAME TERMS. HE ALSO SUBMITTED THAT FROM THIS APPOINTMENT LETTER , IT CAN BE SEEN THAT THE RELATIONSHIP IS OF EMPLOYER AND EMPLOYEE AND THEREF ORE, SECTION 192 IS APPLICABLE AND NOT 194J. LEARNED DR OF THE REVENUE SUPPORTED T HE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE RELEVANT RECORD AND DETAILED PAPER BOOK AND WE FIND THAT THERE WAS RELATIONSHIP OF EMPLOYER AND EMPLOYEE AS PER THE TERMS AND CONDI TION OF THE EMPLOYMENT. IT IS STATED IN THE APPOINTMENT LETTER AVAILABLE ON PA GE 8 OF THE PAPER BOOK THAT THE APPOINTMENT IS ON THE POST OF STAFF NURSE. IT IS A LSO SPECIFIED THEREIN THAT THE DUTY IS TO BE PERFORMED AS PER THE TIMINGS OF THE H OSPITAL, SHE HAS TO RESIDE AT HEAD OFFICE AND DO EMERGENCY DUTY ALSO WHENEVER REQ UIRED. FROM THESE TERMS OF APPOINTMENT AND OTHER TERMS OF THE APPOINTMENT AS S TATED IN THE APPOINTMENT LETTER AVAILABLE ON PAGE 8 OF THE PAPER BOOK, WE AR E SATISFIED THAT IT IS A RELATIONSHIP OF EMPLOYER AND EMPLOYEE AND THEREFORE , SECTION 192 IS APPLICABLE AND NOT SECTION 194J. REGARDING THIS CONTENTION OF THE LEARNED AR OF THE ASSESSEE THAT THE TERMS OF APPOINTMENT ARE SAME FOR ALL OTHER APPOINTMENTS ALSO, LEARNED DR OF THE REVENUE COULD NOT BRING ANY MATER IAL ON RECORD TO CONTROVERT THIS CLAIM. HENCE, WE HOLD THAT FOR THE ENTIRE PAYM ENT OF RS.76,36,769/- DURING THE PRESENT FINANCIAL YEAR, SECTION 192 IS APPLICAB LE AND SINCE THIS IS NOT A CASE OF 4 THE REVENUE THAT THERE IS ANY SHORT DEDUCTION OF TD S AS PER SECTION 192 ALSO, WE CANCEL THE ENTIRE DEMAND RAISED BY INVOKING SECTION 194J OF THE I T ACT. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) A ND ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- SD/- (A.K. GARODIA ) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:19/05/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REG ISTRAR