TMI Blog2014 (10) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... its i.e. fixed deposits made by the Registry in terms of the orders passed by the Court in Motor Accident Claims cases. The matter was referred to the Finance/Purchase Committee for examination. The Committee convened its meeting on 20th May, 2014 and was of the view that since the dispute involved is intricate and public interest is involved, therefore, it was recommended that the matter requires consideration on judicial side. The recommendation of the Committee was treated as Public Interest Litigation and suo motu proceedings were drawn. 2. Notices were issued to the respondents, who filed objections. 3. Respondents No.1 to 3, in their joint reply, pleaded that initially they were not deducting the tax on the said deposits, but the objections were raised by the concerned Authorities and that is why they started deducting the tax. Respondents No.1 to 3 have specifically averred in paragraphs 3 to 9 of their reply as to how they started making tax deductions. 4. Respondents No.4 and 5 also filed the reply and pleaded that in terms of the Circular No. 8/2011, (F.No.275/30/2011-IT(B)], dated 14-10-2011, (Annexure-4, with the reply), issued by the Income Tax Authorities, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act defines the word person . It is apt to reproduce Section 2(31) of the Act hereunder: ' person includes- (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. Explanation - For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains;' 13. While going through the said provisions of law, one comes to the inescapable conclusion that the mandate of the said provisions does not apply to the accident claim cases and the compensation awarded under the Motor Vehicles Act cannot be said to be taxable income. The compensation is awarded in lieu of death of a person or bodily injury suffered in a vehicular accident, which is damage and not incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point of time with reference to the settled principles on assessment of damages. In doing so, the Tribunal can also ignore the claim made by the claimant in the application for compensation with the prime object to assess the award based on the principle that the award should be just, equitable, fair and reasonable compensation. 18. The ratio of the above said decision is to provide immediate relief to the victims of a vehicular accident, who have suffered damages, in order to save them from starvation and other social evils. 19. The damages are to be assessed while making guess work read with the fact as to what is the loss of dependency to the claimants/victims of a vehicular accident. 20. The Apex Court in Ghaziabad Development Authority v. Dr.N.K. Gupta 2002 INDLAW NCDRC 189, has held that damages paid for the death of a person cannot be equated with the income and tax cannot be deducted. It is apt to reproduce the observations made by the Apex Court hereunder: 'It would, therefore, appear to us that the provisions of the Land Acquisition Act where interest is payable under Sections 28 and 34 and tax is deducted at source under section 194A of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at source from the interest payable to the complainant. Accordingly, the order of the State Commission is upheld and this revision petition is dismissed.' 21. The Apex Court in the decision in Haryana Urban Development Authority v. Dev Dutt Gandhi, (2005) 9 SCC 497, while dealing with the land acquisition cases, held that compensation awarded in lieu of the acquired land or enhanced amount paid or interest thereon made cannot be termed as income and income tax cannot be deducted. It is apt to reproduce paragraphs 3, 8 and 9 hereunder: 3. Before this Court a large number of Appeals have been filed by the Haryana Urban Development Authority and/or the Ghaziabad Development Authority challenging Orders of the National Consumer Disputes Redressal Commission, granting to Complainants, interest at the rate of 18% per annum irrespective of the fact of each case. This Court has, in the case of Ghaziabad Development Authority v. Balbir Singh reported in (2004) 5 SCC 65, deprecated this practice. This Court has held that interest at the rate of 18% cannot be granted in all cases irrespective of the facts of the case. This Court has held that the Consumer Forums could grant dam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st under Section 34 is for delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of enhanced value of the land which is not the case in the matter of payment of interest under Section 34. 25. It is clear from reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation. It was held by the Constitution Bench of the Supreme Court in Sunder v. Union of India - (2001) 7 SCC 211, that indeed the language of Section 28 does not even remotely refer to market value alone and in terms it talks of compensation or the sum equivalent thereto. Thus, interest awardable under Section 28, would include within its ambit both the market value and the statutory solatium. It would be thus evident that even the provisions of Section 28 authorise the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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