THE UNITED INDIA INSURANCE CO LTD vs. HANUMANTAPPA S/O LATE DURGAPPA

IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE 14TH DAY OF AUGUST, 2012 BEFORE THE HON’BLE MR.JUSTICE AJIT J.GUNJAL WRIT PETITION No.61316/2009 (GM-CPC) BETWEEN: THE UNITED INDIA INSURANCE COMPANY LIMITED, BELGAUM, REPRESENTED BY ITS DIVISIONAL OFFICE, UMA MAHESHWAR BUILDING, HOSPET. ... PETITIONER (BY SRI. C V ANGADI, ADV.) AND HANUMANTAPPA S/O LATE DURGAPPA, AGE ABOUT 17 YEARS, OCC STUDENT, SINCE MINOR REPRESENTED BY HIS MOTHER, SMT AMBAMMA W/O DURGAPPA, AGE ABOUT 37 YEARS, OCC COOLIE, R/O BUVANAHALLI VILLAGE, TQ HOSPET, DIST BELLARY. ... RESPONDENT (BY SRI. Y.V.RAVIRAJ TO TAKE NOTICE FOR INCOME TAX DEPARTMENT, RESPONDENT SERVICE OF NOTICE IS HELD SUFFICIENT.) THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE ENTIRE RECORDS IN EXE.CASE NO.26/2008 ON THE FILE OF THE ADDL.CIVIL JUDGE (SR.DN.) HOSPET, RESULTED IN PASSING OF THE IMPUGNED ORDER AT ANNEXURE-A.

: 2 : THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The respondent herein had lodged a claim petition seeking compensation for the injuries suffered by him. The said claim petition was accepted in part and a sum of Rs.2,66,000/- was determined as compensation with interest at 6% per annum from the date of petition till the date of deposit. Since the said amount was not deposited, the respondent filed execution petition seeking recovery of the award amount. 2. The petitioner/insurer deposited compensation of Rs.3,46,303/- on 24/04/2008 before the Trial Court at Hospet. The petitioner also deducted a sum of Rs.9,102/- on 15/04/2008 and it was credited to the Central Government and TDS certificate was issued under Section 203 of the Income Tax Act. The

: 3 : petitioner also files a memo accordingly before the Executing Court. The Executing Court, however, has passed the impugned order directing the petitioner to deposit the balance of Rs.7,924/-. Being aggrieved by the said order, petitioner is before this Court. Since the revenue to the State is involved, notice was issued to Mr. Raviraj, standing counsel for the income tax who has entered appearance. 3. I have heard Mr. C.V.Angadi, learned counsel for the petitioner as well as Mr. Raviraj. 4. Mr. Raviraj, learned counsel for the Revenue submits that having regard to the specific and precise provision of sub-section 3(ix) of Section 194A of the Act, any interest on the compensation amount awarded by the MACT, if, exceeds Rs.50,000/-, tax is required to be deducted at source during the financial year. He

: 4 : submits that if the interest component is less than 50,000/-, the question of deducting tax at source on the interest component does not arise. 5. Indeed Section 197A of the Act is referable to ‘No deduction to be made in certain cases’. Indeed, under Section 194EE of the Act, if declaration in writing in duplicate in the prescribed form and verified in the prescribed manner indicating that they are not liable to pay the tax, is not liable to be deducted at source, Section 197A of the Act would come to their aid. 6. But, however, in the case on hand it is to be noticed that the interest component itself is more than Rs.50,000/-. Thus, I am of the view that the petitioner was within its limits to with hold tax component and pay the balance of amount as interest component. Having said so, I am of the view that the impugned order

: 5 : passed by the Executing Court is liable to be interfered. Hence, the following order: Petition is allowed. Impugned order is set aside. Deduction at source is confirmed. Sum of Rs.8,000/- deposited in this Court shall be refunded to the petitioner. If the respondent propose to file his income tax returns he can lodge a claim for refund of the said interest component, if it is less than the taxable limit.

Sd/-

JUDGE kmv