Payment to Consultant doctors engaged by agreement could not be treated as salary liable to TDS under section 192

By | October 4, 2015
(Last Updated On: October 4, 2015)

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


Commissioner of Income-tax (TDS)


Yashoda Super Speciality Hospital



JULY  4, 2013


K.J. Sengupta, CJ. – This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated June 30, 2010, in relation to the assessment year 2008-09, on the following suggested questions of law :

“1.Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in setting aside the order passed against the assessee under section 201 and section 201(1A) of the Income-tax Act ?
2.Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that there existed no relationship of employer and employee between the assessee and the consultant doctors, employed in the hospital, can be said to be based on material on record ?”

2. The whole issue involved in this matter is whether the doctors are employees of the assessee or not, if so, payment made to the doctors are treated to be salaries so as to attract the provisions of section 192 of the Income-tax Act.

3. The learned Tribunal as well as the Commissioner of Income-tax (Appeals), on facts and on examining the document-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 provision for payment of any provident fund and gratuity. The only clause in the agreement is that the doctors cannot take up any other assignment. Reading the agreement as a whole, 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 facts, 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 of the Income-tax Act. We are of the view that the application of law depends upon the appreciation of facts. This court in exercise of the jurisdiction under section 260A of the Income-tax Act, cannot reappreciate the facts or substitute its own appreciation when appreciation of facts of both the authorities below was found to be rational and possible on given fact. The appreciation reached by both the authorities below has to be accepted by this court. 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, we are of the view that the law has been correctly applied. Therefore, we do not find any question of law involved in this matter.

4. The appeal is accordingly dismissed. No order as to costs.


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