2024 (11) TMI 504 - HC - Income Tax

Non deposit the deducted dues under the provisions of Section 194C - HELD THAT - Taking into account that the amount Seventy One Lakh Eighty Three Thousand Seven Hundred Eighty Eight has already been deposited, in the opinion of this Court, the first prayer made in the writ petition no longer survives. Entitlement to interest in terms with Section 244A - In the opinion of this Court, the petitioner only in the year 2019 intimated the respondent authorities about the incorrect PAN number in the Form No. 16 A as enclosed as Annexure 10 to the writ petition. This Court has also taken note of that there are no other materials placed before this Court to show that had these amounts which were required to be deposited by the respondent No. 2, if were deposited, the petitioner would have been entitled to the refunds. In absence of such materials, the question of granting interest as claimed do not arise. Additionally, this Court further finds it relevant to observe that Section 244 A of the Act of 1961 cannot be made applicable to the present facts as the said provision appears to duly apply in respect to cases where the Department had delayed the payment of refunds. Moreover, the delay in depositing the amount by the respondent No. 2 would be a private contractual dispute between the petitioner and the respondent No. 2 Accordingly, this Court does not find any ground for issuance of a writ for payment of interest in terms with Section 244A.

Summary

Issues:
1. Non-deposit of deducted amount by respondent No. 2.
2. Incorrect PAN number in Form 16A.
3. Petitioner seeking mandamus for corrections and interest.
4. Deposit of the deducted amount during proceedings.
5. Entitlement of petitioner to interest under Section 244 A.
6. Applicability of Section 244 A to the present case.
7. Disposal of the writ petition and potential claim for compensation.

Analysis:

The petitioner, engaged in construction and development works, alleged that respondent No. 2 failed to deposit an amount of Rs. 71,85,065 deducted from bills for three financial years. The petitioner sought a mandamus to correct the PAN number and deposit the amount, along with interest under Section 244 A of the Income Tax Act, 1961. The respondent deposited Rs. 71,83,788, claiming the shortfall was due to a departmental error of Rs. 1,277. The Court noted the deposit and ruled the first prayer of the writ petition moot.

Regarding interest under Section 244 A, the Court found the petitioner only notified the incorrect PAN number in 2019 and lacked evidence to prove entitlement to refunds if the amounts were deposited timely. The Court held Section 244 A inapplicable as it pertains to delayed refunds by the Department, not deposit delays by private entities. Consequently, the Court denied the petitioner's claim for interest under Section 244 A, citing the absence of grounds for issuance of such a writ.

In conclusion, the Court disposed of the writ petition, clarifying that the ruling does not prevent the petitioner from seeking compensation in an appropriate forum for any losses due to the delayed tax deposit. The judgment emphasized the lack of grounds for interest payment under Section 244 A and highlighted the private contractual nature of the deposit delay issue between the petitioner and respondent No. 2.