TaxTMI 
TaxTMI 
2015 (8) TMI 277
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....t 2002 with M/S Lakeshore Hospital and Research Centre Limited by which, the latter had undertaken to perform various professional services in the assessee's hospital. On the payments made during the assessment years 2005-2006, the assessee deducted tax at the rate of 2% under Section 194C. However, assessment was completed on the basis that tax deductible was at 5% as prescribed under Section 194J and the entire tax in this regard was disallowed under Section 40(a)(ia)of Act. First Appellate Authority confirmed the assessment and the Tribunal also rejected the appeal filed by the assessee concerning the assessment year 2005-2006. 2. In ITA 572/11 filed against the order of assessment for the assessment year 2006-2007, the assessment o....
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....ertakes to run the Gastroenterology, Gastrointestinal Surgery, Urology, Nephrology and Anaesthesiology departments of the First Party as provided herein below for a period of three (3) years from the date of starting the Second Party's Hospital which is expected to be on 1st September, 2002. 4. Gastroenterology and G1 Surgery team headed by Dr.Philip Augustine and Dr.H.Ramesh respectively together with the Consultants in the said Departments i.e., Dr.Mathew Philip. Dr.G.N.Ramesh, Dr.Roy J. Mukkada, Dr.Deepak Varma, Dr.A.Venugopal, Dr.Lekha, Dr.George Jacob etc. the Urology team headed by Dr.George P.Abraham, the Nephrology team headed by Dr.Mohan A Mathew would continue to extent their professional services on behalf of the Second Part....
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....after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of time prescribed under sub section (1) of Section 200." 7. Reading of this provision shows that any fees or professional services or fees for technical services payable to a resident 'on which' tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the 'time prescribed' under Section 200(1) of the Act, this provision is attracted. 8. This provision is attracted in cases where fee for professional services or technical services is 'payable' on which tax is 'deductible ....
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....leat potius quam pereat." In India United Mills Ltd. v. Commissioner of Excess Profits Tax this court observed: "That section is, it should be emphasised, not a charging section, but a machinery section and a machinery section should be so construed as to effectuate the charging sections." 9. If Section 40(a)(ia) is understood in the manner as laid down by the Apex Court, it can be seen that the expression "tax deductible at source under Chapter XVII-B" occurring in the Section has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B. Therefore, as in this case, if tax is deductible under Section 194J but is deducted under Section 194C, such a deduction would not satisfy the requirements of Secti....