In a recent case in favour of Muthoot Health Care, the Kerala High Court stayed the recovery proceedings under Income Tax Act, 1961 on Tax Deduct Service(TDS) demand over consultant doctors. The question is on consultant doctors are employees of the hospital/company and TDS has to be deducted under Section 192.
Muthoot Health Care Private Limited, the petitioner is a Private Limited Company incorporated under the Companies Act, 1956 having a Multi – Specialty Hospital at Kozhancherry. The petitioner is an assessee under the Income Tax Act, 1961 (‘the Act’). For the assessment year 2017-2018, 2018-2019 and 2019-2020, the petitioner has been issued with assessment order to assessment orders.
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In the said proceedings issued under Section 201 of the Act, the 1st respondent took a view that consultant doctors are employees of the hospital/company and TDS has to be deducted under Section 192. The Senior Counsel for the petitioner submitted that the Commissioner of Income Tax has already taken a contrary view in the decision in ADDC/JCIT A-3 Bangalore/10003/2017/18 in respect of another hospital/ company.
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Challenging the assessment orders, the petitioner has preferred appeals under Section 250 of the Act. It is submitted that though the appeals were heard pursuant to series of notices, orders are not passed. In the meantime, the 1st respondent has issued order demanding the amounts.
The petitioner has filed this writ petition for quash the same by the issue of the writ of certiorari or such other appropriate writ, direction or order. Further to Issue a writ of mandamus or other appropriate writ, direction or order staying recovery of the amounts demanded under, and direct the Respondents to refrain from taking any coercive or other proceeding for recovery of any disputed amounts demanded pending disposal of this Writ Petition.
A single bench of Justice Murali Purushothaman held that “The petitioner was heard pursuant to series of notice, it is only just and proper to keep in abeyance the recovery proceedings pursuant to pending final disposal of the appeal. Accordingly, there will be a direction to the 2nd respondent to pass final orders on appeals as expeditiously as possible, at any rate, within a period of six months from the date of receipt of a copy of this Judgment. There will be a stay of further proceedings pursuant to appeals are disposed of. “
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