Payments Made To Doctors Would Be Covered By TDS Provisions U/S 194J Of Income Tax Act: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) consisting of M. Balaganesh (Accountant Member) and Anubhav Sharma (Judicial Member) has held that the payments made to doctors would be covered by TDS provisions under Section 194J and not Section 192 of the Income Tax Act.

Section 194J of Income Tax Act relates to fees for professional or technical services. Section 194J in the Income Tax Act, 1961 states that any entity, excluding individuals or Hindu Undivided families, making payments to a resident for professional or technical services must deduct TDS at either 10% or 2% of the payment credited. It must depend on the nature of the services rendered.

As per section 192, the responsibility of providing correct and complete particulars of perquisites or profits in lieu of salary given to an employee is placed on the person responsible for paying such income i.e., the person responsible for deducting tax at source.

The assessee company is engaged in the business of establishing, maintaining and running of Hospital and Multispeciality healthcare facilities. A TDS Survey under section 133A was carried out in the business premises of the assessee company on 10.8.2011 wherein it was transpired by the Survey Team that the assessee had been making payment of consultancy charges to Doctors. These payments were subjected to deduction of tax at source by the assessee in terms of section 194J of the Act.

The Survey Team and the AO held that these payments would have to be treated as salary and accordingly tax to be deducted at source would be in terms of section 192. The proceedings u/s 201(1) / 201(1A) were initiated on the assessee and differential rate of TDS was sought to be collected from the assessee by treating it as “assessee in default” u/s 201(1) and consequential interest under section 201(1A).

The AO clearly stated that the facts in Asst Years 2010-11, 2011-12 and 2012-13 were found to be identical and similar treatment was given by him for the earlier years. Consistent with the practice, he treated the assessee as “assessee in default” and levied tax and interest on the assessee for the year under consideration also.

The CIT(A) observed that the same issue had already been decided in favour of the assessee by the Tribunal and held that the payments to doctors would be covered only under section 194J of the Income Tax Act and not under section 192 of the Income Tax Act.

The issue raised was whether treating the payment made by the assessee as covered u/s 194J of the Income Tax Act in respect of all categories of Doctors instead of Section 192 being TDS on Salary.

The tribunal upheld the order passed by the CIT(A).

Counsel for Appellant: Kanv Bali

Counsel for Respondent: Shaily Gupta

Case Title: ACIT verses Artemis Medicares Services Ltd

Case Number: ITA No. 554/Del/2016

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