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2022 (2) TMI 236 - HC - Income TaxTDS u/s 194A - TDS on the interest component of the compensation paid by insurance company to the claimants-respondents by way of an award passed by the Tribunal - HELD THAT:- The person making payment is bound to deduct tax at source (TDS) on the interest component of the compensation awarded by the Tribunal where the amount of such interest paid in a financial year exceeds ₹ 50,000/-. Indisputably, the interest component in the instant case was exceeding ₹ 50,000/- and, therefore, in the absence of any pan card provided by the claimants, the Insurance Company deducted income tax at the rate of 20% as TDS and deposited the same in the government treasury. That being the position, the petitioner-Insurance Company has carried out the mandate of Clause (ix) of Section 194-A of the Income Tax Act and has not committed any illegality. Tribunal has taken note of the fact that the TDS deducted by the petitioner has been deposited and Form-16-A too has been produced, yet the Tribunal has called upon the Insurance Company to deposit the amount again with it so that same is disbursed to the claimants. The approach adopted by the Tribunal is not countenanced by law. The amount deducted at source as a tax on the interest component is deposited with the government treasury is the money deposited for and on behalf of the income tax payee i.e. claimants and, therefore, there cannot be unjust enrichment by making payment twice.
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