M.M. Kumar, J. - (1.) THIS appeal filed under Section 260A of the IT Act, 1961 (for brevity, the Act') is directed against order dt. 25th Sept., 2006, passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (for brevity, the Tribunal'), in ITA No. 681/Chd/2005, in respect of asst. yr. 2004 -05. The Revenue has claimed that following substantial questions of law would emerge for determination of this Court from the aforementioned order of the Tribunal: 1. Whether on the facts and the circumstances of the case, the Tribunal was right in law in treating the payment to persons as professional charges instead of salary in the absence of any bills/expense vouchers?
(2.) WHETHER on the facts and circumstances of the case, the Tribunal was right in law in holding that these payments were not liable to deduction of tax under Section 192(1) of the IT Act, 1961? 2. Brief facts of the case are that the AO during the course of inspection of books of account and other documents noticed that the assessee had paid a sum of Rs. 90,10,136 to various doctors under the head 'Professional expenses'. The assessee was making payments to those doctors who were called for treatment for indoor as well as outdoor patients. The assessee submitted before the AO that the doctors who are specialists in their respective fields and visited hospital for few hours to provide medical treatment to the patients, were paid their professional fees. It was also submitted that there were no duty hours of such doctors nor there was any control exercised by the management of the hospital over such doctors. In order to buttress the aforementioned stand it was pointed out that no day -to -day attendance register was kept for the visiting doctors and the hospital merely provided them the space and medical equipments to attend the indoor patients. Such doctors would visit, collect their professional charges and were not obliged to stay longer than but was required as per the need of a particular patient. Therefore, the case of the assessee was that there was no employer employee relationship and the payments made to such doctors were not assessable under Section 15 of the Act under the head 'Salary'. However, the AO disagreed with the aforementioned contention and held that in the absence of any bill submitted by the doctors for payment and non -maintenance of details of work done by such doctors, it has to be assumed that they were part -time employees of the hospital. It was further held that the payments were their remunerations/salary and the assessee respondent was required to deduct TDS from the payment under Section 192(1) of the Act and interest under Section 201(1A) of the Act. Accordingly, a demand of Rs. 19,82,247 was raised under Sections 201 and 201(1A) of the Act.
(3.) ON appeal, preferred by the assessee before the CIT(A), order of the s AO was reversed by holding that employer employee relationship could not be established by the Revenue and the payments made to the doctors could have been considered as salary only in that eventuality. It was further held that the doctors' visit was not confined to one hospital only and they may be visiting various hospitals by remaining 'on call'. Therefore, the assessee respondent was not liable for TDS under Section 201 of the Act and no interest could have been charged under Section 201(1A) of the Act. Accordingly, the demand raised by the AO was deleted.;