9911796707
TMI Blog2017 (4) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... t and order dated 30 July 2012 awarded compensation of Rs. 3,43,000/inclusive of no fault liability amount together with the simple interest at the rate of 7.5% per annum from the date of filing of the claim petition till realisation of the said amount. 3. The case of the Petitioner is that it has satisfied the Award of the Tribunal by depositing a cheque of an amount of Rs. 3,23,502/towards the principal amount, after adjusting no fault liability amount already paid and Rs. 1,26,918/towards the interest part, after deducting of tax at source (TDS) as per the provisions of Section 194A(3)(ix) of the Income Tax Act,1961. The TDS amount is already deposited with the Income Tax Authority and the TDS certificate in the form No.16A is produced before the Tribunal. 4. The Respondent No.1 would contend before the Tribunal that the Petitioner could not have deducted tax at source but ought to have deposited the full award amount. Respondent No.1 being aggrieved by this action of the Petitioner thus moved Execution Application No.38 of 2013 praying for issuance of warrant of attachment against the Petitioner. According to Respondent No.1, the Petitioner has defaulted in depositing the ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto consideration the said three provisions of the Income Tax Act which are required to be read conjointly. It is submitted that even in terms of clause (vi) of the directions of the Division Bench in Gauri Deepak Patel & Ors.(supra), Respondent No.1 can claim refund from the Income Tax Authorities. It is submitted that the effect of the impugned order is that the Petitioner is again made to pay the said amount to Respondent No.1, when the amount is already deposited with the Income Tax Department. This would amount to double payment. It is thus contended that the Petitioner has rightly deducted the TDS and deposited the sum with the Income Tax department in the name of Respondent No.1. 8. As regards the application of the above provisions of the Income Tax Act, learned Counsel for the Petitioner would submit that on a conjoint reading of these provisions, following interpretation is available:( a) The interest on compensation granted by MACT is chargeable to tax in the year in which it is received by the Assesseeclaimant in terms of Sections 145A(b) & 56(2)(viii) of Income Tax Act.; (b) As per Section 194A(3)(ix), the person making payment of interest on compensation granted by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the effect is that the award amount stands reduced. It is submitted that the Petitioner who is a accident victim cannot be in a situation where he is required to again pursue proceedings with the Income Tax Authorities in raising a claim of the TDS amount. Such intention cannot be gathered from the provisions of the Motor Vehicles Act. In support of his submission, the learned Counsel has also placed reliance on the judgment of the learned Single Judge of Madras High Court in the case "Managing Director, Tamil Nadu 5 (2016)72 Taxmann.com335 (Gujarat) State Transport Corporation (Salem) Ltd., Bharathipuram, Dharmapuri Vs. Chinnadurai" (2016)5 MLJ 105. 11. I have heard the learned Counsel for the parties. With their assistance, I have also perused the impugned order, relevant documents as placed in the paper book as also the various decisions as relied on behalf of the parties. 12. The issue which falls for consideration of the Court is 'whether the Petitioner would be justified in deducting tax at source (TDS) in respect of the interest payment made under the award of the Tribunal.' It would be appropriate to consider the relevant provisions of the Income Tax under whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention as urged on behalf of the Petitioner if is accepted, then, the provisions of Section 194A(3)(ix) would be rendered meaningless which categorically provides that for application of subsection (1) such interest income paid during the financial year should exceed Rs. 50,000/. The Division Bench of this Court in the case of Gauri Deepak Patel & Ors.(supra) has accepted the interpretation of Section 194A as laid down in the decision of the Gujarat High Court in the case of "Smt.Hansagauri Prafulchandra Ladhani Vs. Oriental Insurance Co.Ltd." 2007 ACJ 1897 (Gujarat) and accordingly has laid down a procedure under which the Insurance companies or the owners of the motor vehicles depositing the amount in compliance of the Award of the Motor Accidents Claims Tribunal.These directions of the Division Bench lay down a complete scheme which the Insurance company is required to follow when the amount of compensation is deposited in pursuance of the Award of the Tribunal which include the interest amount. The Division Bench issued the following directions to be followed in all the cases arising before the Tribunal:" 6. Accordingly, we direct that the following procedure as laid down in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act,1961 for the refund of the amount deducted under the provisions of Section 194A(3)(ix) of the Act, the concerned authority shall decide such applications with utmost expedition." 13. The learned Counsel for Respondent No.1 also relies on a recent judgment of the Division Bench of Gujarat High Court in the case "New India Assurance Co.Ltd. Vs. Bhoyabhai Haribhai Bharvad"(supra) wherein though the Insurance Company tried to assert the proposition on clause (ix) and (ixa) of subsection (3) of Section 194A of the Income Tax Act (inserted with effect from 1.6.2015 by Finance Act,2015 substituting clause (ix)), the Division Bench however following the law laid down in the case of Smt.Hansagauri Prafulchandra Ladhani (supra) and confirming the interpretation as held therein wherein in a similar situation the law laid down in the case Smt.Hansagauri Prafulchandra Ladhani (supra) was not followed by the insurance company, it was directed that it was open to the Insurance company to approach the Income Tax Department for refund of tax. In the present case there is no application of clause (ix) and (ixa) of subsection (3) of Section 194A as inserted with effect from 1 June 2015. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositing the compensation in favour of the claimants. It therefore, cannot avoid liability of depositing such amount with the Claims Tribunal. The Claims Tribunal had committed no error in insisting on the insurance company in making good the shortfall." 14. Learned Counsel for Respondent No.1 has then placed reliance on a recent decision of the learned Single Judge of the Madras High Court in "Managing Director, Tamil Nadu State Transport Corporation (Salem) Ltd., Bharathipuram, Dharmapuri Vs. Chinnadurai" (supra). Though this decision does not consider the decision of the Division Bench in "Gauri Deepak Patel" (supra), the Court has held that the Motor Vehicles Act is a social welfare legislation and if there is conflict between the social welfare legislation and a tax legislation, in that case the social welfare legislation will prevail, since it subserves larger public interest. The learned Judge coming to this conclusion has followed the decision of the Division Bench of the Himachal Pradesh High Court in the "Court on its Motion vs. H.P.State Cooperative Bank Ltd. & Ors" (2014 SCC Online HP 4273) wherein the Division Bench of the Himachal Pradesh quashed the circular dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Karnataka High Court, the Chattisgarh High Court and this Court cited by the Revision Petitioner. This Court is of the view that the Division Bench judgment of the Himachal Pradesh high Court and the judgment of the Single Judge of the Punjab and Haryana High Court lay down the right law and hence, this Court arrives at the conclusion that the compensation awarded or the interest accruing therein from the compensation that has been awarded by the Motor Accident Claims Tribunal cannot be subjected to TDS and the same cannot be insisted to be paid to the Tax Authorities since the compensation and the interest awarded therein does not fall under the term 'income' as defined under the Income Tax Act, 1961. 19. Therefore, this Court directs that the Petitioner Corporation cannot deduct any amount towards TDS and the same shall also be deposited in addition to the amount that has already been deposited to the credit of M.C.O.P.No.879 of 2006, on the file of the Motor Accident Claims Tribunal, Additional District Judge, Fast Track Court, Dharmapuri, within a period of four weeks from the date of receipt of a copy of this order and the Respondent is entitled to take appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
