State Consumer Disputes Redressal Commission
New India Assurance Company Limited vs Natha Singh on 17 August, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH
First Appeal No. 7 of 2017
Date of Institution : 06.01.2017
Date of Decision : 17.08.2017
1. New India Assurance Company Ltd., Opposite ITO, Leela
Bhawan Market, Patiala, through its Senior Divisional Manager.
2. New India Assurance Company Ltd., 87, Mahatama Gandhi
Road, Fort Mumbai, through its Chief Managing Director
Both the Appellants are now represented through the duly
Authorised Signatory of Regional Office at SCO No. 36-37, Sector
17-A, Chandigarh.
....Appellants/Respondents(Ops)
Versus
Natha Singh son of Wagel Singh R/o 33-C, New Lal Bagh, Patiala.
....Respondent/Complainant
First Appeal against the order dated
24.11.2016 of the District Consumer
Disputes Redressal Forum, Patiala.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Rajinder Kumar Goyal, Member
Present:-
For the appellants : Sh. Nitin Gupta, Advocate
For the respondent : Sh. R.S. Dhaliwal, Advocate
GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER
ORDER
First Appeal No. 7 of 2017 2 The appellants/respondents (hereinafter referred as Ops) have filed the present appeal against the order dated 24.11.2016 passed by the District Consumer Disputes Redressal Forum, Patiala (hereinafter referred as the District Forum) in Miscellaneous Application No. 22 dated 30.5.2016 vide which it was observed that according to the definition of interest as contained in Section 2(28A) of the Income Tax Act and provisions of Section 194-A of the Income Tax Act are not applicable and the respondents/JDs have wrongly deducted TDS interest from the amount payable/paid to the decree holder. Accordingly, they were directed to pay a sum of Rs. 11,007/- deducted as TDS alongwith interest at the rate as earlier awarded by the District Forum.
2. On the basis of complaint filed by the complainant/respondent Natha Singh against the Ops vide order dated 22.1.2013 complaint filed by the complainant was allowed. Its First Appeal No. 282 of 2013 was filed before the Hon'ble State Consumer Disputes Redressal Commission, Punjab, which was disposed off vide order dated 1.3.2016 and the State Commission was pleased to dismiss the appeal. No further appeal/revision was filed by the Ops.
3. However, while making the payment, a sum of Rs. 11,007/- was deducted as TDS, which was challenged by the complainant/applicant before the District Forum, on the basis of that application, the impugned order was passed.
4. Aggrieved with the order passed by the District Forum, the appellants/Ops have filed this appeal under Section 27A of the First Appeal No. 7 of 2017 3 Act. The counsel for the appellant relied upon Section 2(28A) and 194-A of the Income Tax Act, therefore, the TDS was correctly deducted from the amount to be paid to the complainant and the order passed by the District Forum is incorrect. It was further stated that the judgment "GDA Vs. Dr. N.K. Gupta" passed in Revision Petition No. 2244 of 1999 is not applicable. The Hon'ble National Commission while interpreting the provisions of Section 28, 34 and 194-A of the Act observed that in case the interest payment is by way of damages, do not make them as interest under the Income Tax Act. It was so held in "Delhi Development Authority Vs. Income Tax Officer", 1995 (53) Income Tax Tribunal decisions page 90. Counsel for the respondent/complainant also referred to the judgment of the Hon'ble Punjab and Haryana High Court passed in CR No. 430 of 2015 "New India Assurance Company Ltd. Vs. Sudesh Chawla and others", decided on 30.11.2015 wherein it was observed that compensation received under the Motor Vehicles Act is on account of loss of earning capacity, on account of death or injury or on account of pain and suffering, as such, receipt is not by way of earning or profit. Award of compensation is on principle of restitution to place the claimant in the same position in which he would have been had the loss of life or injury has not been suffered. Therefore, the order calling upon the Insurance Company to pay TDS/deduct TDS on the interest part are not sustainable. A reference has also been made to the judgment of the Hon'ble National Commission reported in III (2012) CPJ 722 First Appeal No. 7 of 2017 4 (NC) "Geeta Jethani & Ors. Versus Airport Authority of India & Anr." Wherein it was observed that compensation paid to the parents, whose child died in escalator maintained by Airport Authority, respondents should not have deducted TDS. Compensation is by way of damages. Damages paid for the death of the person cannot be equated with income, as such, TDS cannot be deducted. A reference has been made to another judgment of the Hon'ble Supreme Court IV (2004) CPJ 2 (SC) "Haryana Urban Development Authority versus Dev Dutt Gandhi". It was a case of refund, which was ordered alongwith interest against HUDA and after relying upon the judgment of Ghaziabad Development Authority, it was observed that in such cases, no question of deduction of TDS. A reference has been made to 1 (2005) CPJ 16 (SC) "Haryana Urban Development Authority Versus Raj Mehta" wherein after relying upon the judgment 'Ghaziabad Development Authority v. Balbir Singh" II (2004) CPJ 12 (SC) again held that HUDA cannot deduct TDS as the payments towards compensation and damages are towards compensation for harassment and escalation in costs of construction.
5. No contrary judgment was referred by the counsel for the appellants to rebut above referred judgments. The respondent/complainant also filed an affidavit before this Commission that the deponent had not taken benefit of the TDS amount, deposited by the appellant/Company with the Income Tax Department nor the deponent will take any benefit in future also. First Appeal No. 7 of 2017 5 Therefore, the order passed by the District Forum that appellants/Op No. 3 was not justified to deduct the TDS on the amount to be paid to the respondent/complainant and we affirm the order passed by the District Forum. However, the appellants/Ops will be at liberty to claim the amount so deposited with the Income Tax Department in accordance with law.
6. Sequel to the above, we do not find any merit in the appeal and the same is dismissed with no order as to costs.
7. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
8. Order be communicated to the parties as per rules.
(GURCHARAN SINGH SARAN) PRESIDING JUDICIAL MEMBER (RAJINDER KUMAR GOYAL) MEMBER August 17, 2017.
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