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2017 (12) TMI 261 - HC - Income TaxTDS u/s 194A - Motor Accident Claims paid by the respondent Insurance Company after deducting @ 20% TDS as the pancard of the applicant was not available - refund of such amount from the Income Tax DepartmentHeld that - In the present case, the petitioner Insurance Company deducted TDS amount from the interest accrued on awarded amount and deposited the TDS amount with Income Tax Department. The claimant respondent No.1 filed Execution Application before the Tribunal wherein the learned Tribunal issued attachment warrant against the Insurance Company. In the present case, the petitioner Insurance Company is not justified in deducting at source in view of the guideline issued in Hansaguri s case(2006 (10) TMI 383 - GUJARAT HIGH COURT). Therefore, it is of the view that it is for the Insurance Company to approach the Income Tax Department for refund and not the original claimants.
Issues:
Challenge to order passed by Motor Accident Claims Tribunal in Execution No.268 of 2016. Detailed Analysis: 1. The petitioner filed a petition under Articles 226 and 227 of the Constitution of India seeking to quash the order passed by the Motor Accident Claims Tribunal at Vadodara, which dismissed the execution petition. The Tribunal had awarded an amount to be paid by the petitioner to the claimant along with interest and cost. The petitioner did not appeal and decided to satisfy the award amount. 2. The respondent Insurance Company paid the award amount after deducting TDS as the applicant's PAN card was not available. The interest payment to the claimant exceeded a certain limit, leading to a 20% deduction as per the Income Tax Act provisions. The deducted interest was then deposited with the Income Tax Department. 3. The petitioner argued that various sections of the Income Tax Act were relevant, including Section 194A, Section 145A, Section 56(1), Section 206AA, Section 201, Section 221, Section 200, and Section 234E. The petitioner highlighted the TDS deduction and subsequent deposit with the Income Tax Department. 4. The claimant, a party in person, contended that his income was below the taxable limit and he should not be liable to pay tax. He also mentioned that the petitioner did not follow the Tribunal's direction regarding the deduction of income tax. 5. The respondent No.4's advocate referred to a previous case where a similar issue was addressed by the Division Bench of the Court. The Court discussed the provisions of Section 194A and emphasized that the Insurance Company was not justified in deducting TDS based on the guidelines provided in a previous case. 6. The Judge, after considering all submissions and relevant judgments, dismissed the petition. The Court held that the Insurance Company was not justified in deducting TDS as per the guidelines from a previous case, and it was suggested that the Insurance Company should approach the Income Tax Department for any refund, not the original claimants. In conclusion, the judgment dismissed the petition, emphasizing that the Insurance Company should seek a refund from the Income Tax Department based on the guidelines provided in previous cases regarding TDS deductions in such situations.
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