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2017 (3) TMI 1239 - HC - Income TaxDemand of TDS amount earlier deducted but returned later to the employees - Insurance company directed to pay/deposit amount deducted towards TDS - amount payable and paid to the original claimant so as to comply the award dated 21.02.2008 passed by the Commissioner in Claim Application filed by the claimant - Held that:- Either under misconception or on erroneous reading of the provision or under mistaken belief the Insurance Company deducted ₹ 15,793/from the amount payable towards compensation and interest pursuant to the decree by Workmen's Compensation Commissioner. The interest amount awarded by learned Commissioner was required to be spread over in respect of the period from the date of accident till the date of judgment. If the said procedure had been followed then the amount payable towards interest would not invite the obligation to deduct tax at source. However, the Insurance Company failed to follow the said procedure as explained in above mentioned decision by Hon'ble Division Bench. Instead the petitioner considered entire income of ₹ 1,53,938/as interest of the claimant for accounting year of 2008 and consequently it deducted ₹ 15,793/, from the amount payable to the claimant and deposit it with the Income Tax Department. The above discussion has also brought out the fact that in entire transaction there is no fault of the claimant and therefore claimant cannot be penalised for action and mistake of the Insurance Company. The poor workman, who is not even assessee and whose income at the relevant time was not taxable, cannot be made to undergo entire process of filing return and reclaim the amount. Therefore, there is no justification to interfere with and disturb the order passed by the Commissioner. The learned Commissioner has passed the impugned order after taking into account the direction and guidelines issued by Division Bench of this Court in Hansagauri Prafulchandra Ladhani and ors v. Oriental Insurance Company Limited and ors, (2006 (10) TMI 383 - GUJARAT HIGH COURT) and, therefore also there is no justification to interfere with the said direction. Under the circumstances, the petition should fail and should be rejected. The petition is not accepted for the reasons mentioned above and it is, therefore, rejected. It is, however, clarified that it will be open to the Insurance Company to follow such procedure as may be permissible under Law to seek refund of the amount i.e. ₹ 15,793/, which it has deposited with Income Tax Authority, if it is so permissible under applicable provisions and this order or the order passed by learned Commissioner would not stand in way of Insurance Company to claim the refund of the said amount in accordance with law, if permissible.
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