THE ORIENTAL INSURANCE COMPANY LIMITED vs. SHRI KALEGOWDA

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WP/29055/2013HC KarnatakaKAHC01028644201301 September 2015Bench: A.S.BOPANNA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the petitioner was justified in deducting TDS from the compensation amount, as the interest component exceeded the threshold. However, the lower court was directed to re-examine the calculation of the amount payable, allowing parties to file memos of calculation.

What were the facts?

The Oriental Insurance Company Limited (petitioner) was ordered to pay a sum of Rs. 1,33,557/- to the respondent. The petitioner deducted Tax Deducted at Source (TDS) from this amount, which the lower court deemed unjustified. The petitioner filed a writ petition challenging this order.

What were the issues?

Whether the insurance company was justified in deducting TDS from the compensation amount. The correctness of the calculation of the amount payable under the decree.

Which sections of the Income-tax Act were involved?

Income Tax Act

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 1ST DAY OF SEPTEMBER, 2015

BEFORE

THE HON’BLE MR. JUSTICE A S BOPANNA

WRIT PETITION NO.29055/2013 (GM-AC)

BETWEEN:

THE ORIENTAL INSURANCE COMPANY LIMITED DIVISIONAL OFFICE NO 10, 2ND FLOOR NAGAPRABHA CHAMBERS, NO 213/217, 4TH CROSS, 3RD MAIN CHAMARAJPET, BANGALORE 560 004 REP. BY ITS REGIONAL MANAGER, REGIONAL OFFICE, THE ORIENTAL INSURANCE COMPANY LIMITED, LEO SHOPPING COMPLEX, NO 44/45, RESIDENCY ROAD, BANGALORE -560 025 BY ITS MANAGER. ... PETITIONER

(BY SRI. RAJAGOPALAN R, ADV.)

AND:

SHRI KALEGOWDA S/O LATE BAKKEGOWDA @ SIDDEGOWDA AGED ABOUT 40 YEARS HADANOOR VILLAGE, SEELNERE HOBLI K R PET TALUK MANDYA DISTRICT 571 426 ... RESPONDENT

(BY SRI.P NATARAJU, ADV.)

THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, WITH A PRAYER TO CALL FOR THE RECORDS PERTAINING TO EX NO.56/08 ON THE FILE OF THE CIVIL JUDGE [SD] AND JMFC, KR PET AND TO AND QUASH

THE ORDER DATED 22.4.13 PASSED IN EX 56/08 ON THE FILE OF THE CIVIL JUDGE [SD] AND JMFC, KR PET, MANDYA DIST VIDE ANNX-B.

THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:

O R D E R The petitioner is before this Court assailing the order dated 22.04.2013 passed in Execution No.56/2008.

2.

The order impugned would disclose two aspects of the matter. Firstly, it is indicated that the judgment debtor viz., the petitioner herein is due in a sum of Rs.1,33,557/-. In the second part, the Court below has indicated that the Tax Deducted at Source by the petitioner is not justified since the Court below has arrived at the conclusion that it is the choice of the decree holder in that regard. On the legal aspect with regard to the deduction of the TDS from the amount payable, considering the fact that the interest derived out of the compensation amount is more than Rs.50,000/-, the

petitioner had an obligation under the provisions of the Income Tax Act to deduct the tax from the amount payable and issue form No.16A to the decree holder so as to enable the decree holder to file necessary returns before the department and seek for refund of the additional amount, if any that has been brought to tax.

3.

Hence to the said extent, the Court below was not justified in holding that the petitioner is not required to deduct any amount at source. However, with regard to the actual amount to be paid under the decree as claimed in the execution petition, the Court below would have to redo the process by permitting the parties to file the memo of calculation with regard to the payments made.

4.

While the petitioner files the memo of calculation, they would be entitled to indicate the amount that has been deducted as TDS and in that light, the calculation as made shall be accepted. With regard to the

deduction that is made, the petitioner shall furnish a copy of form No.16A to enable the respondent to work out his rights in respect of the refund of the tax, if any by approaching the department, if already not furnished.

The petition stands disposed of in the above terms.

Sd/-

JUDGE

akc/bms

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