Tribunal held that, third Party Administrator (TPA), who was responsible for making payment to hospitals for rendering medical services to policy holders under various medical insurance policies issued by several insurers, was liable to deduct tax at source from payments made to hospitals only professional services relating to medical services alone should be liable for deduction of tax at source and not payment towards bed charges, medicines used on patients, transportation charges, implants, consumables etc. If certificate from an auditor has been obtained from deductee that it had paid taxes in income tax return filed by him, had been brought into effect by Finance Act, 2012 w.e.f. 1-7-2012, therefore, it could not be applied for impugned assessment year ie 2009-10 .Accordingly liable to pay interest only in respect of professional fees and not on reimbursement – Partly allowed . ( AY. 2009 -10)
Vipul Medcorp TPA (P.) Ltd. v. ACIT (2018) 172 ITD 610/ 68 ITR 32 (SN) (Delhi) (Trib.)
S. 194J : Deduction at source-Fees for professional or technical services-Third Party Administrator (TPA), who was responsible for making payment to hospitals for rendering medical services to policy holders under various medical insurance policies issued by several insurers, was liable to deduct tax at source from payments made to hospitals only professional services relating to medical services alone should be liable for deduction of tax at source and not payment towards bed charges, medicines used on patients, transportation charges, implants, consumables etc-Consequence of failure to deduct or pay-Interest – If certificate from an auditor has been obtained from deductee that it had paid taxes in income tax return filed by him, had been brought into effect by Finance Act, 2012 w.e.f. 1-7-2012, therefore, it could not be applied for impugned assessment year ie 2009-10 -Accordingly liable to pay interest only in respect of professional fees and not on reimbursement – Partly allowed. [S. 201(1), 201(IA)]