March 2023
(A) Salary — Difference between salary and professional income — Factors to be considered whether particular income constituted salary — Remuneration of doctors working in hospital — Contracts between hospital and doctors should be considered — Contracts showing relationship between hospital and doctors not of master and servant — Remuneration not taxable as salary (B) Reassessment — Notice — Law applicable — Effect of amendments w.e.f. 1st April, 2021 — Show-cause notice under section 148A and opportunity to assessee to be heard — Notice under section 148A should be based on tangible “information” — Remuneration of doctors working in hospital — Order under section 148A for issue of notice of reassessment without examining contracts between the hospital and doctors — Order under section 148A not valid
By K. B. Bhujle, Advocate
Reading Time 8 mins
86 DR. Mathew Cherian vs. ACIT
[2023] 450 ITR 568 (Mad):
A.Y.: 2018-19
Date of order: 1st September, 2022
Sections 15, 28, 147, 148 and 148A of ITA 1961:
(A) Salary — Difference between salary and professional income — Factors to be considered whether particular income constituted salary — Remuneration of doctors working in hospital — Contracts between hospital and doctors should be considered — Contracts showing relationship between hospital and doctors not of master and servant — Remuneration not taxable as salary
(B) Reassessment — Notice — Law applicable — Effect of amendments w.e.f. 1st April, 2021 — Show-cause notice under section 148A and opportunity to assessee to be heard — Notice under section 148A should be based on tangible “information” — Remuneration of doctors working in hospital — Order under section 148A for issue of notice of reassessment without examining contracts between the hospital and doctors — Order under section 148A not validThe assessee is a practicing doctor. On the basis of documents seized in the course of a survey at a hospital, and consequent inferences, the authorities came to the conclusion that (i) an employer-employee relationship was established between the assessee doctor and the hospital, (ii) the assessee was to be construed as an employee and not full time or visiting consultant, and (iii) the income returned by the doctor had to be as
