Payment made to consultant doctors who were engaged through an agreement, could not be treated as salary liable to TDS under section 192

decision of HIGH COURT OF ANDHRA PRADESH

Commissioner of Income-tax (TDS) V/s.Yashoda Super Speciality Hospital 

Section 15, read with section 192, of the Income-tax Act, 1961 - Salaries - Chargeable as Assessment year 2008-09  Assessee-company engaged doctors as a consultant through agreement and made payment to them  As per agreement, there was no employer and employee relationship between them  Whether mere existence of one prohibitory clause in agreement that doctors could not take up any other assignment, could change basic character of said relationship Held, no Whether, therefore, said payment could not be treated as salary and as such, deduction could not be made under section 192 - Held, yes

FACT OF THE CASE 

	1)	The assessee-company engaged doctors as a consultant through agreement and made payment to them.
	2)	The Assessing officer treated said payment as a salary and made deduction under section 192.
	3)	On appeal, both the Commissioner (Appeals) and the Tribunal deleted the deduction.
	4)	On revenue's appeal to the High Court :

HELD

■		The Tribunal as well as the Commissioner (Appeals), on facts and on examining the agreement of engagement of the consultant doctors by the assessee, found that there is no relationship of employer and employee. After examining the agreement and various terms and conditions, it was found that the doctors are not administratively controlled or managed by the assessee and they are free to come at any point of time as far as their attendance is concerned and treat the patients. In the agreement, there is no provison for payment of any provident fund and gratuity. The only clause in the agreement is that the doctors cannot take up any other assignment.
■		Both the authorities below observed that the existence of one prohibitory clause, as stated above, does not change the basic character of the relationship between the assessee and the doctors concerned. On fact, the Tribunal found that there is no employer and employee relationship and their payment cannot be treated to be salaries and, as such, deduction cannot be made under section 192.
■		On the given facts, this court can only examine whether the law has been applied properly or not. On a careful reading of the impugned judgment and order, it is of the view that the law has been correctly applied. Therefore, appeal is dismissed CASE REVIEW DCIT v. Yashoda Super Speciality Hospital [2011] 44 SOT 87 (Hyd.)(URO) (para 3) affirmed.