Writ Petition No.1770 of 2015. Case: The New India Assurance Co. Ltd. Vs Hussain Babulal Shaikh & Ors.. High Court of Bombay (India)
| Case Number | Writ Petition No.1770 of 2015 |
| Counsel | For Appellant: Mr. Devendranath S. Joshi, Adv. and For Respondents: Mr. Samir A. Vaidya and Mr. Suresh Kumar, Advs. |
| Judges | G.S. Kulkarni, J. |
| Issue | Income Tax Act, 1961 - Sections 194A(3)(ix), 145A(b), 56(2)(viii); Finance Act, 2015; Civil Procedure Code - Order 21 Rule 43 |
| Judgement Date | November 15, 2016 |
| Court | High Court of Bombay (India) |
Judgment:
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The Petitioner -- New India Assurance Company Limited has filed this petition challenging the order dated 21 November 2014 passed by the learned member of the Maharashtra Accident Claims Tribunal, Mumbai (for short "the Tribunal") whereby an application of Respondent No.1 for issuance of warrant of attachment against the Petitioner in execution of an award, for not depositing part of the award amount, on the ground that the same has been deducted as "tax deducted at source" (TDS), stands allowed.
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Respondent No.1 is the original claimant who sustained injuries in a motor vehicle accident occurred on 17 October 2005. The Respondent No.1 had filed Claim Application No.1178 of 2006, claiming compensation of Rs.50,00,000/from Respondent No.2 and the PetitionerInsurer. The learned member of the Tribunal by his judgment and order dated 30 July 2012 awarded compensation of Rs.3,43,000/inclusive of no fault liability amount together with the simple interest at the rate of 7.5% per annum from the date of filing of the claim petition till realisation of the said amount.
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The case of the Petitioner is that it has satisfied the Award of the Tribunal by depositing a cheque of an amount of Rs.3,23,502/towards the principal amount, after adjusting no fault liability amount already paid and Rs.1,26,918/towards the interest part, after deducting of tax at source (TDS) as per the provisions of Section 194A(3)(ix) of the Income Tax Act,1961. The TDS amount is already deposited with the Income Tax Authority and the TDS certificate in the form No.16A is produced before the Tribunal.
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The Respondent No.1 would contend before the Tribunal that the Petitioner could not have deducted tax at source but ought to have deposited the full award amount. Respondent No.1 being aggrieved by this action of the Petitioner thus moved Execution Application No.38 of 2013 praying for issuance of warrant of attachment against the Petitioner. According to Respondent No.1, the Petitioner has defaulted in depositing the full amount as per the Award by wrongly deducting TDS of Rs.40,034/which was the balance amount liable to be paid by the Petitioner.
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The Petitioner resisted the execution application interalia contending that there is no liability to deposit the said amount, inasmuch as the Petitioner was under a legal obligation to deduct the TDS as per the provisions of the Income Tax,1961 and the same is deposited with the income tax authorities. It is stated that the TDS amount on interest paid as was deposited with the Income Tax department, the Petitioner is not liable to pay any amount to Respondent No.1. The Petitioner produced a TDS certificate and contended that in view of the TDS certificate, Respondent No.1 can approach the Income Tax Authorities if so permissible and make a claim for the said amount.
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The learned member of the Tribunal relying on the decision of the Division Bench of this Court in "Gauri Deepak Patel & Ors. Vs. New India Assurance Co.Ltd. & Anr.", 2011 ACJ 1782 observed that the Petitioner has not followed the guidelines as contained in the decision for depositing the TDS amount. It is observed that the Petitioner having knowledge of the provisions of the Income Tax Act and the law laid down by the Division Bench ought not to have deducted a lumpsum TDS and deposited the same with the Income Tax department. It was observed that the Petitioner by deducting the TDS amount has actually deprived Respondent No.1 from receiving the award amount, and as the Petitioner was not ready to deposit the amount, warrant of attachment was directed to be issued by passing the following order: "
ORDER
Application is allowed.
Issue attachment warrant under Order 21 rule 43 of CPC on process fee for attachment of three computers in the office of the insurance company. If the insurance company deposited the amount before issuance of attachment warrant then the warrant be stayed."
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On the above conspectus, learned Counsel for the Petitioner submits that the action of the Petitioner in depositing the TDS amount was legal and valid in view of the provisions of Sections 194A( 3)(ix), 145A and 56(2)(viii) of the Income Tax Act,1961. It is submitted that the decision of the Division Bench of this Court in Gauri Deepak Patel & Ors.(supra) relied on behalf of Respondent No.1 and referred in the impugned order, is clearly distinguishable, as it does not take into consideration the said three provisions of the Income Tax Act which are required to be read conjointly. It is submitted that even in terms of clause (vi) of the directions of the Division Bench in Gauri Deepak Patel & Ors.(supra), Respondent No.1 can claim refund from the Income Tax Authorities. It is submitted that the effect of the impugned order is that the Petitioner is again made to pay the said amount to Respondent No.1, when the amount is already deposited with the Income Tax Department. This would amount to double payment. It is thus contended that the Petitioner has rightly deducted the TDS and deposited the sum with the Income Tax department in the name of Respondent No.1.
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As regards the application of the above provisions of the Income Tax Act, learned Counsel for the Petitioner would submit that on a conjoint reading of these provisions, following interpretation is available:( a) The interest on compensation granted by MACT is chargeable to tax in the year in which...
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