Sanjiv Khanna, J.

1. The five Petitioners claim that they are Third Party Administrators (TPA, for short) and perform functions by acting as facilitators of the insurance companies, which provide cashless facilities to the mediclaim policy holders. The Petitioner companies have been licensed by the Respondent No. 2, Insurance Regulatory and Development Authority, to provide the said support insurance services. The Petitioners state that they reimburse and make payments to the hospitals for the expenses incurred on the medical treatment of the policy holders of the insurance company. They discharge the liability of the insurance company under the contract of insurance entered into between the insurance company and the policy holder.

2. The Petitioners have challenged circular No. 8/2009 issued by the Central Board of Direct Taxes, Respondent No. 1 herein on the ground that the circular requires deduction of tax at source (TDS) under Section 194J of the Income Tax Act, 1961 (the Act, for short) when the TPAs make payment to the hospitals to settle/pay the dues of the policy holders on behalf of the insurance company.

3. The challenge to the circular is on four grounds. Firstly,