Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Iffco Tokio General Insurance Company Ltd. Versus Krishnakumar Munshiram Agrawal & 3

2017 (12) TMI 261 - GUJARAT HIGH COURT

TDS u/s 194A - Motor Accident Claims paid by the respondent Insurance Company after deducting @ 20% TDS as the pancard of the applicant was not available - refund of such amount from the Income Tax DepartmentHeld that:- In the present case, the petitioner Insurance Company deducted TDS amount from the interest accrued on awarded amount and deposited the TDS amount with Income Tax Department. The claimant respondent No.1 filed Execution Application before the Tribunal wherein the learned Trib .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, Advocate for the Petitioner Mr Mr Bhatt, Senior Advocate with Mrs Mauna M Bhatt Advocate for the Respondent JUDGMENT 1. This petition is filed by the petitioner - original opponent No.3 under Articles 226 and 227 of the Constitution of India praying to quash and set aside the order passed by the learned Motor Accident Claims Tribunal at Vadodara (Main) in Execution No.268 of 2016 thereby dismissing the execution petition at Ex.1. 2. Heard Mr.Rathin P. Raval, learned advocate for the petitioner .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to satisfy the award amount of ₹ 1,20,701 + (cost) + 86,130.90 (total interest) to the claimant. 4. The award amount was paid by the respondent Insurance Company after deducting @ 20% TDS as the pancard of the applicant was not available. This is pursuant to the provisions of Section 194A, (3)(ix) and (ixa) of the Income Tax Act ( IT ) as inserted by Finance Act, 2015 with effect from 1.6.2015. The petitioner calculated the interest portion for claimant as per the award amount. It is crys .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 194A, (3)(ix) and (ixa) of the Income Tax Act ( IT ) as inserted by Finance Act, 2015 with effect from 1.6.2015. 6. He has submitted that the petitioner calculated the interest portion for claimant as per the award amount. It is crystal clear that interest payment to the claimant exceeds ₹ 50,000/and hence the interest amount @ 20% was deducted. This deducted interest was pursuant to the provisions of the Income Tax Act referred above. It was then deposited with the IncomeTax Department .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tax in default, Section 200 provides duty of a person deducting tax and Section 234E fee for default in furnishing statements. 8. He has submitted that as evidenced by the TDS certificate, ₹ 16,226/was deducted as TDS in June, 2016. The learned Tribunal has calculated interest upto December, 2016 and hence the amount is ₹ 21,229/as per the learned Tribunal. Lastly, he has submitted that the claimant can always claim the TDS deducted amount from the IT Department. 9. Mr.Krishnakumar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 1,20,701/with 9% interest and cost, the learned Tribunal has specifically directed to follow the guidelines for deduction of Income Tax in the case of Hansagauri Prafulchandra Ladhani & Ors. vs. Oriental Insurance Co. Ltd., reported in 2007 ACJ 1897 (DB) Guj. He has submitted that the petitioner has not followed the said direction of the learned Tribunal and has incorrectly deducted the income tax amounting to ₹ 16,226/on the total amount of interest accrued during the year 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent No.1 alongwith interest at the rate of 9% and cost. 12. He has submitted that the petitioner having accepted the award of the Tribunal has deposited the principal amount alongwith interest but after deducting TDS @ 20% from the interest amount at the time of depositing of TDS with the learned Claim Tribunal. Thereafter respondent No.1 preferred Execution Petition No.268 of 2016 in M.A.C.P. No.1886 of 2006 praying therein to make payment of TDS deducted and deposited with the Central Governme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y - (ix) to such income credited or paid by way of interest on the compensation amount awarded by the Motor Accident Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees. 10. The Gujarat High Court in case of Smt. Hansagauri Prafulchandra Ladhani (supra) had occasion to interpret this provision w.e.f. 01.06.2015, however, this Clause (ix) of subsection ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd rupees. 11. Under Clause (ix) ti sub section (3) of Section 194A of the Act, as it originally stood, requirement of deducting tax at source under sub section (1) would not apply 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

year does not exceed fifty thousand rupees. 12. It would, therefore, be wholly incorrect to read the current provision of subsection (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, worded slightly differently. The case of credit of interest on compensation awarded by the Claims Tribunal continues to f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion the interest income exceeded ₹ 50,000/. In fact, this Court in case of Smt. Hansagauri Prafulchandra Ladhani (supra) provided for further splitting up of this ceiling of ₹ 50,000/per claimant basis. Looked from any angle, 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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

x Department and permitted the insurance company to receive it back from the claimants as and when such refund would be made by the Income Tax Department. However, in the present case, we are not inclined to accept such a formula. Firstly, the amount in question is not very large. Secondly, in order to provide for such formula, we would have to call upon the claimants to appear before us, a luxury which poor litigants can illafford. Thirdly, the insurance company should have properly advised its .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version