2024 (8) TMI 369 - HC - Income Tax

Higher Deduction of income tax @ 30% from the arrears paid on salary on a misunderstanding of the applicable tax rates - responsibility of District Inspector of Schools - as submitted it is a bonafide mistake resulting from a misinterpretation of an income tax provisio - Finance and Accounts Officer has also stated that income tax was deducted on a misunderstanding but has informed the Court that her duty was merely to give suggestions to the District Inspector of Schools and she has not made the final decision for deduction of the amount and it is the District Inspector of Schools, who is responsible for making deduction towards income tax HELD THAT - The aforesaid conduct of the concerned officers in first declining to pay arrears of salary to the petitioner for the period July, 2010 to October, 2021 and after this Court entertained the writ petition, making payment of the petitioner after deducting income tax at the rate of 30%, against the provisions contained in Section 192(1) of the Income Tax Act, 1961, prima facie indicates their vindictive approach against the petitioner. It also prima facie reflects incapability of the aforesaid officers in proper performance of their duty, regarding which a final finding can only be arrived at by the competent authority by holding a detailed inquiry. Accordingly, the opposite party no. 1-Additional Chief Secretary, Secondary Education, Government of U.P. is directed to get an inquiry conducted through some competent officer in the aforesaid matter regarding conduct of the aforesaid officers, in accordance with law, and to ensure suitable action as per the outcome of the inquiry. As prima facie a case of deliberate harassment of the petitioner at the behest of the authorities of the State has been made out in the present case, the Director of Education (Secondary Education), U.P. is directed to file his personal affidavit within a period of four weeks from today showing cause as to why interest be not awarded to the petitioner for the period of delay in payment of arrears of salary to the petitioner. List this case in the week commencing 02.09.2024.

Issues:
1. Correction of opposite party description
2. Deduction of income tax at a higher rate
3. Responsibility for income tax deduction
4. Failure to pay arrears of salary
5. Vindictive approach and incompetence of officers
6. Direction for inquiry and suitable action
7. Award of interest for delay in payment

Analysis:

Correction of opposite party description:
The learned counsel for the petitioner requested to correct the description of the opposite party to include the State of U.P. and the Director Education (Secondary) as opposite party no. 6.

Deduction of income tax at a higher rate:
The District Inspector of Schools and the Finance and Accounts Officer mistakenly deducted income tax at a rate of 30% from the arrears paid to the petitioner. They claimed it was a bonafide mistake due to misinterpretation of tax provisions.

Responsibility for income tax deduction:
The Finance and Accounts Officer clarified that she only provided suggestions, and the final decision for deduction was made by the District Inspector of Schools. Both officers stated that the deducted amount had already been paid to the income tax department and could not be refunded to the petitioner.

Failure to pay arrears of salary:
Initially, the officers declined to pay the petitioner's arrears but later made the payment after deducting income tax. This action was against the provisions of the Income Tax Act, indicating a vindictive approach and incompetence on the part of the officers.

Direction for inquiry and suitable action:
The court directed the Additional Chief Secretary, Secondary Education, U.P. to conduct an inquiry into the officers' conduct and take appropriate action based on the findings. A detailed inquiry is necessary to determine the officers' capability and motives.

Award of interest for delay in payment:
Due to the apparent deliberate harassment of the petitioner, the Director of Education (Secondary Education), U.P. was directed to file a personal affidavit explaining why interest should not be awarded for the delay in paying the arrears of salary.

This judgment highlights the importance of following legal procedures and acting in good faith while discharging official duties to avoid unnecessary disputes and delays in payments.

← Previous Next →