9911796707
TMI Blog2015 (3) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... es upon them. In both the writ applications, the prayer is to quash the order dated 10.11.2011 passed by the District Judge, Gopalganj in M.V. Case No.01 of 2005 and the order dated 2.6.2012 passed by the same learned Judge in MACT Case No.08/2007, by which applying the provision of Section 194A (3) (ix) of the Income Tax Act, 1961, an amount of Rs. 24,175 and Rs. 17,922/- respectively in the two cases have been directed to be disbursed to the private respondents which had been deducted as Income Tax at source by the petitioner-company while paying the amount under the award of the Motor Accident Claims Tribunal. The facts of the cases lie within a narrow compass so far as the determination of the issue involved is concerned and are preci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieved by the same, the petitioner is before this Court. Learned counsel for the petitioners relies upon the relevant provisions of the Income Tax Act itself in support of the stand that the petitioners were under statutory liability under the said Act to have made deduction of the said amount while making payment by way of interest on the compensation amount awarded by the Motor Accident Claims Tribunal. The total amount of interest component under the award came to a little over Rs. 1,20,000/- and, therefore, under the said provisions the petitioners were bound to make the deduction of tax at source while making payment and accordingly from the interest component an amount of Rs. 24,175/- was deducted as income tax at source. In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding Rs. 50,000/-, failing which, they may have to face the consequences, such as prosecution, even. In this view alone, when the execution petition was filed for the realization of the award amount, deducting the income tax at source for the interest, since it exceeded Rs. 50,000, on the basis of the above said provision, the balance alone had been deposited, for which, the Court cannot find fault. 7. The stand taken by the revision-petitioner and the act performed by them, are supported by the ratio laid down by the apex Court in Bikram Singh & Ors. Vs. Land Acquisition Collector & Ors. (1977) 139 CTR (SC) 475: (1997) 224 ITR 551 (SC). The apex Court in the above ruling had considered the payment of interest on delayed compensation, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt exceeding Rs. 50,000 has been paid by the insurance company, during the financial year, they are bound to deduct the income-tax at source and there is no escape. 9. The trial Court without considering the actual effect of the amendment to s. 194A of the IT Act, which came into effect from Ist June, 2003, had erroneously directed the insurance company to deposit the entire amount including the deduction made statutorily. It is not the case of anybody that the amount was deducted by the insurance company and appropriated and in fact, this shall go to the Government. If the petitioner is not liable to pay tax, his remedy is to approach the Department concerned for refund of the amount, requesting that the period of interest should be sprea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force: Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of Section 44AB during the financial year immediately preceding the financial year in which such interest is credited or paid, shall be liable to deduct income-tax under this Section. (3) The provisions of sub-section (1) shall not apply-(ix) to such income credited or paid by way of interest on the compensation amount awarded by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar provision under the Income Tax Act with regard to deduction of tax, it was not open to the District Judge to have held to the contrary. The only remedy for the assessee under such circumstances would have been either to have approached the assessing officer under Section 197 of the Income Tax Act before the said payment was made for issuing a certificate for deduction of income-tax at a lower rate or no deduction of income-tax as the case may be or if that had not been done then to approach the Income Tax Department for refund of the amount in case no income-tax or less amount is due and payable by the concerned respondent. In the aforesaid view of the matter, both the writ applications are allowed and the impugned orders dated 10.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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