By TIOL News Service

KOLKATA, OCT 06, 2017: THE issue before the Tribunal is - Whether payments made to consultant doctors engaged with a hospital, without any existing employee-employer relationship, are not salary and hence, no TDS liability u/s 192 is warranted on same. YES is the answer.

Facts of the case:

The Assessee-a domestic compnay, which operates a hospital viz., Apollo Gleneagles Hospital at Kolkata, is engaged in providing health care services. The Assessee filed its return for the relevant AY. During the assessment proceeding, the AO noticed that 116 doctors were engaged by the Assessee hospital as consultants and an aggregate of Rs.52,97,98,732/- was paid to these doctors as professional fees which was subjected to TDS u/s 194J. In course of the proceedings, the AR contended that the AO failed to appreciate the fact that there was no existence of employer-employee relationship between the Assessee hospital and the consultant doctor. However, the AO ignored the Assessee’s contention and hence, considered them as employees of the Assessee hospital and held that the payments made to those doctors should be taxed u/s 192. On appeal, the CIT(A) held that the consultant doctors did not enjoy an employee-employer relationship with the Assessee hospital and therefore the AO could not hold payments made to consultant doctors as salary payment within the meaning of the section 192.

Tribunal held that,

++ the issue involved in present appeal as to whether the payments made to consultant doctors attached to the hospital are salary so as to bring into effect of section 192 instead of section 194J, is squarely covered in favour of the Assessee by the decision of this Tribunal in Assessee’s own case in ITA No. 1456/Kol/2014 for AY 2011-12, wherein, the Tribunal held that "...the payments made to the consultants doctors are not salary, and, therefore, tax is not deductible u/s 192. Hence, the relief granted to the Assessee is sustained...". As the issue involved in the present appeal as well as the material facts are similar to its own case and no controverting material has been brought on record by the Revenue, the Assessee hospital is granted relief, by respectfully following the decision of the Tribunal.

(See 2017-TIOL-1376-ITAT-KOL)