TMI Blog2016 (9) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... the insurance company was not justified in deducting tax at source while depositing 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. - SPECIAL CIVIL APPLICATION NO. 13031 of 2016 - - - Dated:- 8-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR VIBHUTI NANAVATI, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This petition is filed by New India Assurance Company Ltd. challenging an order dated 18.06.2016 passed by the Motor Accident Claims Tribunal, Vadodara, below application Exh. 7 in MACP Execution Application No. 284 of 2015. 2. The petition arise in following background: One Hakuben, wife of Bhoyabhai Haribhai Bharwad was travelling in a bus on 23.05.2008 when another bus, which was insured by the petitioner-insurance company, dashed against it from behind resulting into fatal injuries to passenger Hakuben. Her legal heirs i.e. her husband and children, therefore, filed Motor Accident Claim Petition No. 818 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order dated 18.06.2016 and has issued distress attachment warrant against the petitioner- insurance company, upon which, such insurance company has filed this petition and challenged the said order of Claims Tribunal. 6. It is undisputed that the decision of Division Bench of this Court in case of Smt. Hansagauri Prafulchandra Ladhani and ors vs. The Oriental Insurance Company Ltd . reported in 2007 (2) GLR 291 governed the situation of requirement of deducting tax at source in connection with payment of compensation and interest in motor accident claims cases. The Division Bench had interpreted the provisions of Section 194A of the Income Tax Act and come to the conclusion that the amount of interest accrued each year would have to be apportioned among the claimants on year to year basis and, if the interest payable to any claimant for any financial year exceeds ₹ 50,000/-, only then the Tribunal would permit the insurance company or the owners to pay or allow to be deducted tax at source to the Income Tax Department in respect of that particular claimant for that year. 7. The sole ground raised by the petitioner-insurance company in this petition for deducting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the amount liable to be deducted at source under Section 193(3)(ix) of the Incometax Department in respect of that particular claimant for that particular year, without prejudice to the claimant's case that he is not liable to pay any income-tax for that year. (iii) for the financial year/s for which the interest payable to the concerned claimant does not exceed ₹ 50,000/-, the Tribunal may permit such claimant to withdraw the amount deposited as per direction I(b) without producing the certificate from the concerned income-tax authority that there is no income-tax liability on the interest which has accrued on the compensation awarded by the Tribunal. (iv) It is clarified that the amount other than the amount liable to be deducted at source under Section 194A(3)(ix) shall be invested/disbursed by the Tribunal. III. When the claimants make applications/ representations before the authority under the Income-tax Act, 1961 for refund of the amount deducted under the provisions of Section 194A(3) (ix) of the Act, the concerned authority shall decide such applications/representations within six months from the date of receipt of the applications/representatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a case where any income is credited or paid by way of interest on compensation amount awarded by Motor Accident Claims Tribunal where the amount of such income or, the aggregate amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees. This provision of Clause (ix) is now divide into two parts and is replaced by Clauses (ix) and (ixa). Clause (ix), in the present form, refers to such income credited by way of interest on the compensation amount awarded by the Claims Tribunal. The case of crediting of interest on compensation therefore, would fall in Clause (ix) as it stands currently. Under Clause (ixa) would fall, any payment of interest on compensation awarded by the Claims Tribunal where the amount of such income or the aggregate paid during the financial year does not exceed fifty thousand rupees. 12. It would, therefore, be wholly incorrect to read the current provision of sub section (3) of Section 194A to argue that the cases of income credited by way of interest on compensation awarded by the Claims Tribunal is no longer part of sub section (3) for exclusion from purview of sub section (1) of Section 194A. In other words, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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