TaxTMI 
TaxTMI 
2017 (3) TMI 1239
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....r rendered in W.C.Case No.292 of 1996 by the learned Workmen's Compensation Commissioner, Labour Court, Kachchh at Bhuj on 23.9.2008 (AnnexureF); (B) Your Lordships may further be pleased to grant stay against execution, operation, implementation and effect of judgment and order rendered in W.C.Case No.292 of 1996 by the learned Workmen's Compensation Commissioner, Labour Court, kachchh at Bhuj on 23.9.2008 (AnnexureF); (C) Your Lordships may be pleased to grant adinterim relief in terms of para (B) above, pending hearing and final disposal of the petition. (D) In the alternative, your Lordships may be pleased to direct respondent no.3 Incometax authorities to issue the refund order of the amount directed to be deposited by the petitioner as per the judgment and order rendered in W.C.Case No.292 of 1996 by the learned Workmen's Compensation Commissioner, Labour Court, Kachchh at Bhuj on 23.9.2008 in favour of the original claimant - respondent no.1 herein (AnneF);" 4. The petitioner insurance company is aggrieved by the order directing it to pay/deposit Rs. 15,793/which amount it had deducted towards TDS from the amount payable and paid to the original claim....
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....port his submission, Mr. Nanavati, learned advocate for the Insurance Company relied on Section 194A of Income Tax Act. The said provision reads thus: "SECTION 194A: Interest other than "interest on securities" (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income k [by way of interest on securities], shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct incometax thereon at the rates in force: [Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year in which such interest is credited or paid, shall be liable to deduct income tax under this section] [Explanation.For the purposes of this section, where any income by way of interest as aforesaid is credited to any account whether called "Interest payable accoun....
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....of institutions, associations or bodies] which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette; [(iv) to such income credited or paid by a firm to a partner of the firm;] (v) to such income credited or paid by a cooperative society e [to a member thereof or] to any other cooperative society;] [(vi) to such income credited or paid in respect of deposits under any scheme framed by the Central Government and notified by it in this behalf in the Official Gazette; [(vii) to such income credited or paid in respect of deposits (other than time deposits made on or after the 1st day of July, 1995) with a banking company to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); (viia) to such income credited or paid in respect of,- (a) deposits with a primary agricultural credit society or a primary credit society or a cooperative land mortgage bank or a cooperative land development bank; (b) deposits (other than time deposits made on or after the 1st day of July, 1995) with a cooperative so....
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....ion may be set aside. 8. Mr. Vijay Patel for Ms. Mauna M. Bhatt, learned advocate for Income Tax Department submitted that the petitioner Insurance Company has demanded refund of the amount paid/ deposited by it towards TDS, however, there is no provision under the Act for refund. He further submitted that for reclaiming said amount the claimant shall have to file Return with the Income Tax Authority and reclaim the amount paid by Insurance Company. 9. Learned advocate for original claimant submitted that the claimant is not assessee and he does not have/ earn taxable income and, therefore, claimant would not be able to file return and reclaim the amount deposited by the Insurance Company after deducting it from compensation amount payable to him as per decree dated 21.02.2008 passed by Workmen's Compensation Commissioner. He also submitted that even otherwise for the act or mistake of insurance Company why should the claimant undergo such procedure. On the said grounds learned advocate for claimant supported and justified the direction by Workmen's Compensation Commissioner. 10. I have considered rival submissions and also considered material available on record. ....
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....all permit the Insurance Companies/ owners to pay over the amount liable to be deducted at source under Section 194A3(ix) of the Income Tax 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) It was further directed that for the financial year/s for which the interest payabole to the concerned claimant does not exceed Rs. 50,000=00, the Tribunal may permit such claimant to withdraw the amount deposited as per directions I(b) without producing the certificate from the concerned IncomeTax Authroity that there is no incometax liability on the interest which has accrued on the compensation awarded by the Tribunal. (iv) It was clarified in the said judgment that the amount other than the amount liable to be deducted at source under Section 194/A(ix) shall be invested/ disbursed by the Tribunal. III. It was further directed that when the claimants make applications/ representations before the authority under the IncomeTax Act, 1961 for refund of the amount deducted under the provisions of Section 194/A(ix) of the Act, the concerned Authority shall....
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....t, the only course open for the claimant would be to file Income Tax return and reclaim the amount deducted and deposited by the Insurance Company with Income Tax Department. 17. From above mentioned facts and submissions by learned advocates it has emerged that either under misconception or on erroneous reading of the provision or under mistaken belief the Insurance Company deducted Rs. 15,793/from the amount payable towards compensation and interest pursuant to the decree by Workmen's Compensation Commissioner. 17.1 The interest amount awarded by learned Commissioner was required to be spread over in respect of the period from the date of accident till the date of judgment. If the said procedure had been followed then the amount payable towards interest would not invite the obligation to deduct tax at source. However, the Insurance Company failed to follow the said procedure as explained in above mentioned decision by Hon'ble Division Bench. Instead the petitioner considered entire income of Rs. 1,53,938/as interest of the claimant for accounting year of 2008 and consequently it deducted Rs. 15,793/, from the amount payable to the claimant and deposit it with the In....