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TMI Blog2015 (3) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... on making the payment is obliged to deduct income tax at source while making payment; this is what the petitioners have done. In the said circumstances, it was not open to the District Judge to hold to the contrary. As a matter of fact, the District Judge was exercising his jurisdiction with regard to executing the award but while executing the same he had to be conscious of the fact that any such payment would be subject to statutory provisions. There being clear 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.. W.P. allowed. Orders of the District Judge set aside. - Civil Writ Jurisdiction Case No. 18558 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount was deposited in the account of the Income Tax Department. Respondent No.3 objecting to the deduction of ₹ 24,175 filed a petition on 9.2.2011 before the District Judge, Gopalganj. By the impugned order dated 10.11.2011, it was held that the deduction of ₹ 24,175/- by way of income tax is not sustainable and directed the petitioner to disburse the said amount to the claimant. Aggrieved 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 ₹ 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 ₹ 24,175/- was deducted as income tax at source. In support of the aforesaid stand, learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act, is a revenue receipt exigible to income-tax. The amended definition of interest in s. 2 (28A) of the IT Act, 1961, was not intended to exclude the revenue receipt of interest on delayed payment of such compensation from taxability. Once it is construed to be a revenue receipt, necessarily, unless there is an exemption under the appropriate provisions of the Act, the revenue receipt is exigible to tax. The amendment is only to bring within its tax net, income received from the transaction covered under the definition of interest. 8. Following the above decision, a Division Bench of the Delhi High Court has held in Bhika Ram Ors. Vs. Union of India Ors. (2000) 159 CTR (Del) 462: (1999) 238 ITR 113 (Del); the petitioner was liable to be taxed on the interest on delayed payment of compensation for compulsory acquisition of land. However, the petitioner was at liberty to have the income on account of interest assessed by seeking spread over. The same view was once again reiterated by another Division Bench of the Delhi High Court in Shankar Ors. vs. Union of India Ors. (2002) 178 CTR (Del)26: (2003) 260 ITR 284 (Del). Thus, it is made clear that the compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h income 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 the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees. It is evident from the aforesaid provisions that any person responsible for paying any income by way of interest other than income by way of interest on securities is obliged to deduct income tax thereon at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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