TDS on enhanced compensation and interest referred to Larger Bench amid conflicting Division Bench views.

Conflicting Division Bench views on deduction of tax at source from enhanced compensation and interest on compensation justified reference of the writ petition to a Larger Bench. One view treated interest on delayed compensation as taxable and capable of being spread over the relevant years for computation, while another differed on the manner of TDS deduction in light of the State circular. Because the controversy involved the operation of TDS on compensation and related interest payments, the matter was sent for authoritative determination so the law could be settled clearly; the substantive TDS issue was not decided.

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Issues: Whether the writ petition should be referred to a Larger Bench in view of conflicting Division Bench views on deduction of tax at source from enhanced compensation and interest on compensation.

Analysis: The order notes that one Division Bench had held that interest on delayed compensation is taxable and that the amount may be spread over the relevant years for computation, while another Division Bench had taken a different view on the manner of TDS deduction in light of the State circular. In the presence of these conflicting views, and since the questions involved concerned the operation of TDS on compensation and interest payments, the matter was considered fit for determination by a Larger Bench so that the law could be settled clearly.

Conclusion: The entire writ petition was referred to a Larger Bench for decision on the questions of law as well as on merits.

Final Conclusion: The judgment does not decide the substantive TDS controversy and instead sends the matter for authoritative determination by a Larger Bench.

Ratio Decidendi: Where conflicting Division Bench views exist on the same legal question, the matter may be referred to a Larger Bench for an authoritative ruling.

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