Commissioner Of Income Tax Tds, Jaipur v. M/S Mewar Hospital Pvt Ltd, Priyadarshini Nagar, Bedla Road,Udaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 6/2021 Commissioner Of Income Tax TDS, Jaipur. ----Appellant Versus M/s Mewar Hospital Pvt Ltd, Priyadarshini Nagar, Bedla Road,Udaipur. ----Respondent HON'BLE MR. JUSTICE SANDEEP MEHTA HON'BLE MR. JUSTICE KULDEEP MATHUR 01/11/2022 Judgment The present D.B. Income Tax Appeal under Section 260A ofthe Income Tax Act, 1961 has been filed by the Commissioner ofIncome Tax-TDS, Jaipur against the order dated 05.01.2021passed by the Income Tax Appellate Tribunal, Jodhpur Bench,Jodhpur in IOTA No.01/JODH/2020 for the Assessment Year 2018-19, whereby the appeal against the order of learned CIT (A-1),Udaipur dated 10.10.2019 was dismissed. Learned counsel for the appellant frankly conceded that theappeals involving similar issue have already been dismissed bythis Court in view of the judgment passed by the Division Bench ofthis Court at Jaipur Bench in Escorts Heart Institute &Research Centre Ltd. Vs. Deputy Commissioner of IncomeTax (D.B. Income Tax Appeal Nos.8 and 9 of 2014 decidedon 13.09.2017). under:- “13. Before proceeding with the matter, it will not beout of place to mention that the assessee is running ahospital within State of Rajasthan and they haveentered agreement with three different doctors. Thequestion which came up for our consideration iswhether benefit of 194J and 192 is to be given whereTDS is required to deducted. 14. Counsel for the appellant rightly contended that inthe agreement which was entered between the parties,there is no restriction of private practice whereas incase of service/appointment order, there is prohibitionfor grant of benefit which are required to be givenunder the law and are granted to the employeeswhereas in the case of retainership it is only anhonorary or professional agreement is enteredbetween the parties which may be analogous to themajor service conditions but both the contract aredifferent. One is contract as an employee and theother contract is service for honorary or expert servicenot as a employee which was entered between theparties. Therefore, question which came for ourconsideration is whether payment which was made tothe professional is salary or professional fees. 15. Taking into consideration the case law which hasbeen cited by both the sides, the judgment ofKarnataka High Court (supra) which has been reliedupon by the counsel for the appellant and after takinginto consideration that all the judgments and therulings cited by both the sides were considered in thesaid judgment and the issue was decided as under:“The contention of the learned counsel appearing forthe assessee that CIT had issued an order under s.10(23C)(via) of the Act, by virtue of which theassessee is not liable to deduct TDS under s. 194-I asthe recipient itself is exempted from levy of tax, is notacceptable for the reasons that the said order wasissued by the CIT, Panaji for the asst. yr. 2005-06 to2007-08 subject to the compliance of conditions (I) to(vi) specified therein. The said conditional order shallnot absolve the assessee from the deduction of TDSliability. The compliance/non-compliance of theexemption conditions by the recipient in advancecannot be foreseen in advance by the assessee-company. Moreover, TDS liability under s. 194-I is notdependent on the tax liability/entitlement toexemptionof the recipient. Irrespective of the tax exemption/taxliability of the recipient the assessee has to dischargethe TDS liability under s.194(1). No certificate under s. 197 of the Act is furnished by the assssee to establishthat the recipient is exempted from the tax liability.” 197 of the Act is furnished by the assssee to establishthat the recipient is exempted from the tax liability.” 16. Again same question came up for consideration inother decision of Karnataka High Court where afterconsidering the judgment in Elbit Medical DiagnosticsLtd., the Court has come to the conclusion thatretainer in service are professional service and issuewas answered in favour of the assessee. 17. Taking into consideration the evidence on record,only one view taken by the Tribunal is also contrary, ittwo views are possible, the view much which in favourof assessee is to be taken and in view thereof in thepresent case, the issues are answered in favour of theassessee and against the Department. 18. The appeals stand allowed.” In view of the above, the present appeal is liable to be dismissed and is accordingly dismissed. (KULDEEP MATHUR),J (SANDEEP MEHTA),J 54-skm/-