HIGH COURT OF JUDICATURE FOR RAJASTHAN AT

JODHPUR

1. D.B. Income Tax Appeal No. 25/2019

Commissioner Of Income Tax-TDS, Jaipur

----Appellant

Versus

M/s Mewar Hospital Pvt. Ltd., Priyadarshini Nagar, Bedla Road,

Udaipur.

----Respondent

2. D.B. Income Tax Appeal No. 27/2019

Commissioner Of Income Tax-TDS, Jaipur

----Appellant

Versus

M/s Mewar Hospital Pvt. Ltd., Priyadarshini Nagar, Bedla Road,

Udaipur.

----Respondent

3. D.B. Income Tax Appeal No. 28/2019

Commissioner Of Income Tax-TDS, Jaipur

----Appellant

Versus

M/s Mewar Hospital Pvt. Ltd., Priyadarshini Nagar, Bedla

Road, Udaipur.

----Respondent

For Appellant(s)

:

Mr. Kamal Kishore Bissa Advocate.

For Respondent(s)

:

Mr. Anjay Kothari Advocate.

HON'BLE MRS. JUSTICE SABINA

HON'BLE MR. JUSTICE VINIT KUMAR MATHUR

Order

29/07/2021

(2 of 4)

[ITA-25/2019]

Defects pointed by the office are waived.

Appellants have filed the appeals raising following substantial

questions of law:

“(i) Whether ld. ITAT is justified in holding that the

payment to doctors engaged on regular and full time

basis was in the nature of professional fees u/s 194J and

not salary u/s 192 of Income Tax Act, 1961?

(ii) Whether ld. ITAT is justified in holding that employer-

employee relationship does not exist between the

assessee company and doctors providing regular &

services?

(iii) Whether ld. ITAT is justified in not appreciating the

facts that it is not necessary that an employer shall

made restrictions on professional practice of its

employee even as per Section 17(2) Explanation-3 of

Income Tax Act, 1961 one or more employer are possible

in a single person’s case?”

Learned counsel for the respondent has submitted that the

issue involved in the present cases is no longer res-integra. The

appeals are liable to be dismissed in view of the decision given by

Division Bench of this Court at Jaipur Bench in Escorts Heart

Institute & Research Centre LTD. Vs. Deputy Commissioner

of Income Tax (D.B. Income Tax Appeal Nos.8 and 9 of

2014 decided on 13.09.2017).

Operative part of the order dated 13.09.2017 reads as

under:-

“13. Before proceeding with the matter, it will not be out

of place to mention that the assessee is running a

hospital within State of Rajasthan and they have entered

agreement with three different doctors. The question

which came up for our consideration is whether benefit

of 194J and 192 is to be given where TDS is required to

deducted.

14. Counsel for the appellant rightly contended that in

the agreement which was entered between the parties,

there is no restriction of private practice whereas in

case of service/appointment order, there is prohibition

(3 of 4)

[ITA-25/2019]

for grant of benefit which are required to be given under

the law and are granted to the employees whereas in the

case of retainership it is only an honorary or professional

agreement is entered between the parties which may be

analogous to the major service conditions but both the

contract are different. One is contract as an employee

and the other contract is service for honorary or expert

service not as a employee which was entered between

the parties. Therefore, question which came for our

consideration is whether payment which was made to

the professional is salary or professional fees.

15. Taking into consideration the case law which has

been cited by both the sides, the judgment of Karnataka

High Court (supra) which has been relied upon by the

counsel for the appellant and after taking into

consideration that all the judgments and the rulings cited

by both the sides were considered in the said judgment

and the issue was decided as under:

“The contention of the learned counsel appearing for the

assessee that CIT had issued an order under s. 10(23C)

(via) of the Act, by virtue of which the assessee is not

liable to deduct TDS under s. 194-I as the recipient itself

is exempted from levy of tax, is not a