TaxTMI 
TaxTMI 
2023 (9) TMI 333
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 204 of 2019, titled Hari Narayan v. New India Assurance Company, filed by the respondent/claimant (hereinafter, 'claimant'), came to be dismissed, petitioner has approached this court in the instant proceedings filed under Art. 227 of the Constitution of India, praying therein to set aside the aforesaid order. 2. Precisely, the facts of the case, as emerge from the record, are that the claimants, filed claim petition under S.166 of the Motor Vehicles Act, 1988 (hereinafter, 'Act') seeking compensation on account of injury sustained by him in a motor accident occurred on 31.8.2011 involving Truck bearing registration No. HP24C-3565. Learned Motor Accident Claims Tribunal I, Una, Himachal Pradesh vide award dated 29.10.2018 passed in MA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ictly construed, failing which petitioner shall be liable for penalty contemplated under S. 271 of Income-Tax Act. 5. Aforesaid claim put forth by the petitioner came to be refuted by the claimant, who stated that claim petition was filed on 31.5.2014 and petitioner deposited the award amount on 18.2.2019, whereafter, the claimant earned interest amounting to Rs. 8,62,870/- from the date of filing petition i.e. 31.5.2014 till deposit of amount on 18.2.2019. Claimant claimed that since interest of Rs. 8,62,8370/- was not earned by him in single financial year and the same has to be spilt over 5 financial years, no tax deduction at source could have been done by petitioner. Apart from above, claimant also claimed that the provision, as taken....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t Claims Tribunal on account of his having suffered injury in the accident. It is not in dispute that no tax has been deducted from the amount of compensation awarded by Motor Accident Claims Tribunal rather, petitioner has deducted Rs. 1,72,574/- i.e. 20% of total interest of Rs. 8,62,870/- earned as interest by the claimant on the total amount of compensation of Rs. 20,31,000/-, for the period with effect from 31.5.2014 to 29.10.2018. 11. This court finds that the aforesaid issue stands already adjudicated by Division Bench of this court in CWPIL No. 9 of 2014, titled Court On Its Own Motion v. the H.P. State Cooperative Bank Limited decided on 15.10.2014 and thereafter, Co-ordinate Bench of this court, while placing reliance upon said j....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... motion vs. The H.P. State Cooperative Bank Ltd. and others, reported in 2014 (Suppl.) Him.L.R. (DB) 2575 and reiterated in CWP No. 460 of 2014, titled Shiv Ram Sharma vs. Union of India and others, and other connected matters vide decision dated 3rd June, 2015. The same principle will be applicable in the present case also. 7. Therefore, in view of abovesaid decision, deduction of income tax by petitioner/Insurance Company on the interest accrued/awarded on the compensation deposited by the petitioner/Insurance Company is illegal and is contrary to the law of land. 8. In view of above discussion, this petition is disposed of directing respondent No. 6-Income Tax Officer, Nahan to refund the TDS to the petitioner/Insurance Company wit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d judgments passed by this court as well as High court of Gujarat, it can be safely concluded that compensation and interest thereupon awarded by Motor Accident Claims Tribunal, by no stretch of imagination, can be said to be 'income' rather same being 'damages' granted by court on account of injury or death in accidental cases, cannot be subjected to S. 194 of Income Tax Act, which otherwise mandates for Tax Deduction at Source for the interest amount beyond Rs. 50,000/-. 14. Similarly, this Court in National Insurance Company Ltd. v. Prabha Vati & Ors, Latest HLJ 2021 (HP)(2)1338, has held as under: "3. Section 194-A of Income Tax Act, 1961, clearly provides that any person, not being an individual or a Hindu undivided family, responsi....