Bajaj Allianz Insurance Company Limited Vs Farooq Ahmad Misger and Ors. (Motor Accidents Claims Tribunal)

In the Instant petition, petitioner-Bajaj Allianz Insurance Company Limited (for short “ the Insurance Company ”) seeks quashing of order dated 25.04.2019 passed by Motor Accident Claims Tribunal, Anantnag, (for short “ Tribunal ”) in execution petition titled “ Farooq Ahmad Misger and Anr. v. Sr. Divisional Manager, Bajaj Allianz General Insurance Company Limited” , vide which the Insurance Company has been directed to deposit an amount of Rs.70, 436/-, within a period of 30 days.

¶14

The Insurance Company has assailed the order dated 25.04.2019, inter alia, on the grounds that in terms of Clause (ix) of Section 194-A of the Income Tax Act, 1961, the Insurance Company is duty bound to deduct the tax at source on the interest component of the compensation awarded by the Tribunal where it exceeds Rs. 50,000/- in any financial year. In the present case, it is submitted that the interest component was

¶15

exceeding Rs.50,000/- and, therefore, in terms of Section 194-A of the Income Tax Act, the Insurance Company deducted a sum of Rs.70,436/- on account of TDS and deposited the same with the Central Government.

¶16

Learned counsel for the petitioner, therefore, submits that the Tribunal could not have directed the Insurance Company to pay the said amount yet again for its payment to the claimants.

¶17

Heard learned counsel for the petitioner and perused the material on record, it is necessary to set out the provisions of Section 194-A of the

¶18

Income Tax Act, 1961, which reads as under:-

¶19

“194A. Interest other than "Interest on securities".

¶20

(1) Any person, not being an individual or a Hindu undivided family,

¶21

who is responsible for paying to a resident any income by way of interest other than income 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 income-tax thereon at the rates in force: Provided that:

¶22

The provisions of sub-section (1) shall not apply:(i) to (viii)

¶23

(ix) to such income credited or paid by way of interest on the compensation amount awarded by the Motor Accident Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees.”

¶24

On perusal of Section 194-A of the Income Tax Act, it is clear that the person making payment is bound to deduct tax at source (TDS) on the interest component of the compensation awarded by the Tribunal where the amount of such interest paid in a financial year exceeds Rs.50,000/-.

¶25

The interest component in the instant case was exceeding Rs.50,000/and, therefore, the Insurance Company deducted income tax at the rate of 20% TDS and deposited the same in the Government Treasury.

¶26

That being the position, the petitioner-Insurance Company has carried out the mandate of Clause (ix) of Section 194-A of the Income Tax Act and has not committed any illegality.

¶27

Interestingly, the Tribunal has taken note of the fact that the TDS deducted by the petitioner has been deposited, yet the Tribunal has called upon the Insurance Company to deposit the amount again with it so that same is disbursed to the claimants. The amount deducted at source as a tax on the interest component is deposited with the Government Treasury is the money deposited for and on behalf of the income tax payee, i.e. claimants and, therefore, there cannot be unjust enrichment by making payment twice.

¶28

In this view of the matter, I find merit in this petition, therefore, the same is allowed. The impugned order passed by Tribunal is set aside. The amount of Rs.70,436/-, which has been deposited by the Insurance Company with the Tribunal in terms of interim order shall be released in favour of the Insurance Company along with interest, if any, accrued thereon.

¶29

Disposed of .

¶30

(SINDHU SHARMA) JUDGE

¶31

SRINAGAR

¶32

18.10.2024 Manzoor

¶33

Manzoor Ul Hassan Dar I attest to the accuracy and authenticity of this document Srinagar 29.10.2024 13:56

Bajaj Allianz Insurance Company Limited v. Farooq Ahmad Misger and Ors. (Motor Accidents Claims Tribunal)

Case brief

What is this about?

What did the court decide?

Bajaj Allianz Insurance Company Limited v. Farooq Ahmad Misger and Ors. (Motor Accidents Claims Tribunal)

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Shabu Shoukat Vs Sher E Kashmir University of Agricultural Sciences and Technology and Ors. (Skuast / Ugc)

Shabir Ahmad Wani Vs State of Jk and Ors.

Shakeel Ahmad Mir Vs State of Jk and Others. (Capd)

Reyaz Ahma Mir and Anr. Vs Ut of J and K (Home) and Ors.

M/S Infa Tech Computer Institute Vs Union Territory of J and K and Ors. (Rural Development and Panchayati Raj)

Tanveer Ahmad Khan Vs State and Others (Education)