Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (5) TMI 716 - HC - Income TaxTDS u/s 194A - Motor Accident Claims - Insurance claim award with interest @ 9% per annum from date of claim - whether interest liability would be subject to Tax Deducted at Source (TDS) under Sec. 194 A? - HELD THAT:- Where the Claimants produce the proof of PAN Card, TDS is applied at 10%. In the absence of such PAN Card, it shall be 20%. Not so, insignificant amounts and when refunds are not made to the poor victims, the issue is exacerbated. Following these difficulties for the innocent motor accident victims, a few High Courts have ruled that Sec 194 A was not applicable in these claims. They appear to have done so after due notice and hearing the Income Tax Department. As Transport Corporations are facing Execution Petitions before Claims Tribunals, where TDS was applied and apparent conflict between the decisions and as insurance companies and TDS issue flagged requires to be elevated to a Division Bench or a larger Bench as may be deemed fit by the Hon’ble Chief Justice for a clear cut verdict on the applicability of TDS on interest in Motor Accident Claims atleast in sofar as Tamil Nadu is concerned. Going by the above discussion and the obvious and apparent disagreement between two learned single judges on the issue and unnecessary pendency of EPs and CRPs and difficulties faced by all the stakeholders, I am more than satisfied that it is a fit case to order a blanket stay of all Execution Petitions pending before all Motor Accident Claims Tribunals in Tamil Nadu in relation to and confined to the issue of Tax Deduction at Source vide 194 A of the Income Tax Act, 1961. In respect of EPs which may include the TDS issue and not solely confined to it, only the dispute relating to TDS issue will stand suspended, awaiting a verdict from the larger bench. TDS is in application in millions of motor accident cases since 01.06.2003. Huge sums may have accumulated in the coffers of Income Tax Department. Not all victims may have sought and/ or obtained refunds. Many victims may belong to such strata of society that they may not be in a position to pursue the refund. I deem it fit to leave it to the larger bench to allude to this issue also, and examine the possibility of proper utilization of the unrefunded amounts for the benefit of motor accident victims. The Income Tax Department could be asked to provide statistics relating to the TDS amounts, refunds sought and pending, refunds ordered and no refunds sought for at all, and the period for the same, for this purpose. This is a fit and proper case to direct the Registry to place this matter before the Hon’ble Chief Justice for considering the issues for resolution by a larger bench, as found fit and proper by the Hon’ble Chief Justice.
|