The case ITA No. 5322/DEL/2019 involves the appellant ACIT, Circle-74(1), Delhi, contesting an order in favor of the respondent Fortis Hospitals Ltd., Delhi. The appeal was filed on June 11, 2019, against the order passed by the Commissioner of Income Tax (Appeals)-41, New Delhi, dated March 29, 2019, relating to the assessment year 2017-18.
The ACIT, Circle-74(1), Delhi, filed the appeal to contest the decision of the CIT(A) that held Fortis Hospitals Ltd. was not liable to be treated as an “assessee in default” for non-deduction of TDS under Section 192 of the Income Tax Act, 1961, on payments made to doctors engaged as retainers and consultants.
The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘B’, New Delhi. The bench comprised Accountant Member Dr. B. R. R. Kumar and Judicial Member Sh. Yogesh Kumar US. The hearing took place on May 26, 2022, and the order was pronounced on June 27, 2022.
The appellant, ACIT, Circle-74(1), argued that the payments made to doctors engaged as retainers and consultants should be subject to TDS under Section 192, treating them as employees, rather than under Section 194J, which is applicable to professional services.
The respondent, Fortis Hospitals Ltd., contended that the doctors engaged as retainers and consultants were not employees but independent professionals, and therefore, TDS should be deducted under Section 194J. The respondent emphasized that similar cases have been decided in favor of the assessee by various High Courts and ITAT Benches.
The ITAT reviewed the submissions made by both parties and observed that there is a consensus among the High Courts and ITAT Benches that doctors appointed on retainership basis do not attract Section 192 but rather Section 194J for purposes of TDS on payments made to them.
The following details were crucial in the tribunal’s decision:
The ITAT upheld the decision of the CIT(A) that the provisions of Section 194J were applicable to the payments made to the doctors engaged as retainers and consultants, and not Section 192. Consequently, Fortis Hospitals Ltd. could not be treated as an “assessee in default” for non-deduction of TDS under Section 192. The order was pronounced in the open court on June 27, 2022.
Fortis Hospitals vs. ACIT Circle-74: Appeal on TDS Deductions for Assessment Year 2017-18
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