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TMI Blog2014 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... as been ordered on the award amount and interest accrued on the deposits made under the orders of the Court in Motor Accident Claims cases, is quashed and in case any deduction has been made, they are directed to refund the same, with interest at the rate of 12% from the date of deduction till payment – Decided in favour of assessee. - CWPIL No. 9 of 2014 - - - Dated:- 15-5-2014 - Mansoor Ahmad Mir, CJ And Tarlok Singh Chauhan,JJ. For the Petitioner : Mr. Vishal Mohan, Adv. as Amicus Curiae For the Respondents : Mr Ajay Mohan Goel, Adv., Vinay Kuthiala, Sr. Adv., with Ms Vandana Kuthiala Mr Diwan Singh Negi, Advs. ORDER The Registrar (Judicial) of this Court had put up a note that Bank Authorities are making tax deductions on interest accruedon the term deposits i.e. fixed deposits made by the Registry in terms of the orders passed by the Court in Motor Accident Claims cases.The matter was referred to the Finance/Purchase Committee for examination. The Committee convened its meeting on 20th May,2014 and was of the view that since the dispute involved is intricate and public interest is involved, therefore, it was recommended that the matter requires conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on.] 9. Section 194A clearly provides that any person, not being an individual or a Hindu undivided family, responsible for paying to a resident any income by way of interest, other than income by way of interest on securities, shall deduct income tax on such income at the time of payment thereof in cash or by issue of a cheque or by any other mode. 10. Question is as to who can be said to be a resident . The word resident has been defined in Section 2(42) of the Act. It is apt to reproduce Section 2(42) of the Act hereunder: 2(42). resident mans a person who is resident in India within the meaning of Section 6; 11. Therefore, it is clear that resident means a person who is resident within the meaning of Section 6 of the Act. 12. Section 2(31) of the Act defines the word person . It is apt to reproduce Section 2(31) of the Act hereunder: person includes- (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paragraph 6 of the said decision hereunder: 6. After considering the decisions of this Court in Santosh Devi (Supra) as well as Rajesh v. Rajbir Singh (supra), we are of the opinion that it is the duty of the Court to fix a just compensation. At the time of fixing such compensation, the court should not succumb to the niceties or technicalities to grant just compensation in favour of the claimant. It is the duty of the court to equate, as far as possible, the misery on account of the accident with the compensation so that the injured or the dependants should not face the vagaries of life on account of discontinuance of the income earned by the victim. Therefore, it will be the bounden duty of the Tribunal to award just, equitable, fair and reasonable compensation judging the situation prevailing at that point of time with reference to the settled principles on assessment of damages. In doing so, the Tribunal can also ignore the claim made by the claimant in the application for compensation with the prime object to assess the award based on the principle that the award should be just, equitable, fair and reasonable compensation. 18. The ratio of the above said decision is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 256 of the Income-Tax Act. The Appellate Tribunal held that the amounts paid/credited to the allottees by the DDA under SFS (Self-Finance Scheme) did not fall under any category in section 2(28A) of the Income-tax Act, but represented measure for quantifying compensation for delay in construction and handling over possession of dwelling unit which was in the nature of non-taxable capital income. In coming to this conclusion the Appellate Tribunal relied on various judgments including that of the Supreme Court in the case of Dr. ShamlalNarula v. CIT 1964 Indiaw SC 263. In our view, therefore, considering the definition of interest as contained in Section 2(28A) of the Income-tax Act, the provisions of section 194A were not applicable and the GDA was clearly wrong in deducting the tax deducted at source from the interest payable to the complainant. Accordingly, the order of the State Commission is upheld and this revision petition is dismissed. 21. The Apex Court in the decision in Haryana Urban Development Authority vs. DevDutt Gandhi, (2005) 9 SCC 497, while dealing with the land acquisition cases, held that compensation awarded in lieu of the acquired land or en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, these are cases where amounts are being directed to be paid as compensation for mental harassment and agony and for failure of public duty. In such cases there is no question of deduction of TDS. If TDS has been deducted the Appellants shall, within two weeks from today, forward to the Respondent the amount of TDS deducted along with interest thereon at the rate of 12% from the date it was deducted till payment. 22. The Apex Court in another case titled Commissioner of Income-Tax vs. Ghanshyam (HUF) , reported in [2009] 315 ITR l(SC) 1 laid down similar preposition. It is apt to reproduce paragraphs 24, 25 and 27 hereunder: 24. To sum up, interest is different from compensation. However, interest paid on the excess amount under Section 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas interest under Section 34 is for delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of enhanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as its income and was, therefore, not taxable in the assessment year 1956-57. The financial year in which the additional amount came to be withdrawn ended on 31.3.56. It was held by this Court that although award was made on 29.7.1955, enhancing the amount of compensation payable to the assessee, the entire amount was in dispute in the appeal filed by the State. Therefore, there was no absolute right to receive the amount at that stage. It was held that if the Appeal was to be allowed in its entirety, the right to payment of enhanced compensation would have fallen altogether. Therefore, according to this Court, the extra amount of compensation of ₹ 7,24,914/- was not income arising or accruing to the assessee during the previous year relevant to the assessment year 1956-57. 23. Having said so, the Circular, dated 14.10.2011, issued by the Income Tax Authorities, whereby deduction of income tax has been ordered on the award amount and interest accrued on the deposits made under the orders of the Court in Motor Accident Claims cases, is quashed and in case any such deduction has been made by respondents, they are directed to refund the same, with interest at the rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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