2020 (12) TMI 489 - HC - Income Tax

Refund claim - Officer feels sorry that TDS was deducted as they were under the impression that the amount has to be counted in this year - HELD THAT - The litigation is of the year 2005. The appeal has to be spread over these 20 years as petition was numbered. The petitioner may file a refund application, which shall be considered on merit by the Income-tax department as prima facie TDS should not have been deducted. It is observed that in future the Officer shall be more vigil. This Court cannot pass order of release as the lis is over between the parties before the court concerned. The Tribunal shall release the amount. It is conveyed to this Court that the Tribunal has passed orders whereby the entire amount is kept in Fixed Deposit. The petitioners are not illiterate people. Hence, as per the judgment of the Apex Court in A.V. Padma others Vs. R.Venugopal and others, 2012 (1) TMI 389 - SUPREME COURT no amount be kept in FD as the appeals are now over. The application is allowed.

Summary

Issues:
1. Incorrect TDS deduction by Insurance Company.
2. Appeal spread over 20 years.
3. Assistance in recovering money from Income-tax department.
4. Refund application filing.
5. Order of release by Court.
6. Amount kept in Fixed Deposit by Tribunal.

Analysis:
1. The judgment addresses the issue of incorrect TDS deduction by the Insurance Company. The Officer expressed regret for the deduction, stating it was due to a misunderstanding regarding the timing of the amount. The appellant sought time to present a recent judgment from the Bombay High Court to support their claim that the deduction was unwarranted. The Court directed the Income-tax department to take necessary actions in the matter, emphasizing the need for vigilance to prevent such errors in the future.

2. The judgment notes that the litigation spans over 20 years, with the appeal process being prolonged. The Court referred to a judgment from the case of New India Assurance Co. Ltd. Vs. Hussain Babulal Shaikh, highlighting the need for the Insurance company to assist the appellants in recovering the money deducted as TDS. The Court instructed the petitioner to file a refund application, which would be reviewed by the Income-tax department based on merit.

3. Regarding the order of release, the Court clarified that it could not issue such an order as the dispute between the parties had concluded in the relevant court. Instead, it directed the Tribunal to release the amount. The judgment mentioned that the Tribunal had placed the entire sum in Fixed Deposit, contrary to the directive from the Apex Court in A.V. Padma & others Vs. R.Venugopal, which discouraged keeping funds in FD after the conclusion of appeals.

4. Ultimately, the Court allowed the application, expressing gratitude to the assisting Officers and dispensing with the presence of Respondent No.2. The judgment highlighted the importance of cooperation and adherence to legal procedures in resolving such matters efficiently.