Per Shri Y. R. Meena, Judicial Member - These three appeals are by the assessee against the order of the CIT under section 263. On scrutiny, the CIT found that the assessee had shown income from the Hospital both under the head ‘Salary’ and under the head ‘Profession’, and the ITO has assessed accordingly. According to the CIT, the assessment order is erroneous and prejudicial to the interests of revenue. Therefore, the CIT had issued show-cause notice as to why the consultation fees should not be treated as income under the head ‘Salary’. In response to the notice, the assessee had made the following submissions before the CIT :

(i) Notice under section 263 was issued on a total misapprehension without appreciating the nature of contract between himself and the Bombay Hospital.

(ii) There is no relationship of master and servant or one of the employer and employee of the Bombay Hospital. The fixed amount described as salary is in the nature of honorarium for rendering services to the Bombay Hospital in the General Ward.

(iii) In law, it is well settled that there cannot be a contract of employment an less the employer has the right to control the manner in which the employee works. In the absence of any rules and regulations regarding the fixed hours of work the amount received from the Bombay Hospital cannot be treated as salary.

(iv) The Bombay Hospital does not control the manner in which the work of the Doctors are conducted. The hours of work, both consulting and operative, are decided by him depending upon his convenience.

(v) There is no requirement that he should perform a particular number of operations or he should examine a particular number of patients in the Consulting Room and the Hospital has not reserved any right to regulate the work of doctors in any particular manner.

(vi) The Hospital does not provide any facility in the form of Dearness Allowance, Provident fund, gratuity, etc.

(vii) The age of retirement is not fixed and there are no terms or rules regarding leave which can be taken by him and he is free to go on vacation whenever he decides to do so. However, during the period of absence he has to provide a locum and the professional income during this period is credited to the locum’ s account.

(viii) The patients are visiting him or engaging him on the basis of his standing in the profession and the medical equipment in his rooms is his property.

(ix) The description of the fixed amount which the Hospital pays as salary is itself misleading and inappropriate.

According to the CIT, the above submissions are not conclusive of the claim made by the assessee. But he has not given the reasons why they are not exactly conclusive of the claim. He only stated that the ITO has accepted the claim mechanically. The ITO has not considered the terms and conditions under which the assessee was appointed. The ITO has also failed to examine the expenses claimed. Therefore, according to the CIT, the ITO’s order was erroneous and prejudicial to the interests of revenue. He set aside the orders of the ITO for all the 3 years and directed the ITO to make fresh assessments according to law, after bringing the relevant facts and agreements on record.

2. In appeal before us, learned counsel for the assessee Sri S.E. Dastur submitted that all the relevant material was before the ITO such as, letter of appointment of Dr. S.S. Jain ; Certificate of sharable income from Bombay Hospital ; Salary certificate, Statement of income filed with return of income and statement of income ; Statement of income and expenditure ; Copy of professional tax registration certificate; copy of professional tax challan and copies of appointment letters of Doctors who are really employees of Bombay Hospital. Therefore, it cannot be said that the order of the ITO was mechanical. In fact, all the relevant facts regarding the issue, whether the sharable income from Bombay Hospital is income from profession or salary, was before the ITO and after examining