While upholding the attachment warrant issued against the Insurance Company, the Bombay High Court held that the Company need not pay TDS in respect of the interest payment made under the award of the Tribunal. The Court was considering a writ petition challenging the attachment warrant by the Company.
In the instant case, Maharashtra Accident Claims Tribunal, Mumbai issued a warrant of attachment was the petitioners, New India assurance Co. Ltd, on an application filed by an individual who sustained injuries in an accident where compensation was allowed by the Tribunal. The petitioners while paying the award amount, deducted TDS from such amount. On receipt of the warrant, the petitioner, approached the High Court challenging the same.
Before the Court, the petitioners contended that it has satisfied the Award of the Tribunal by depositing a cheque of an amount of Rs.3,23,502/towards the principal amount, after adjusting no fault liability amount already paid. Further, it was submitted that 2011 guidelines were not applicable in the instant case, and the TDS amount is already paid with the Department.
Justice G.S Kulkarni noticed the decision in Gauri Deepak Patel &Ors. Vs. New India Assurance Co.Ltd. & Anr.” In which it was observed that the Petitioner ought not to have deducted a lumpsum TDS and deposited the same with the Income Tax department.
While rejecting the submissions of the petitioners, the Court said “The submissions on behalf of the Petitioner relying on a cumulative reading of Sections 56, 145A and 194A(3)(ix) of the Act cannot be accepted for two reasons, firstly there cannot be any dispute in the context what Section 56 and 145A would provide in respect of tax to be paid on interest directed to be paid on the compensation awarded by the Tribunal, as these provisions would stipulate and secondly, in view of the above clear position in law as laid down by the Division Bench of this Court in Gauri Deepak Patel & Ors. (supra) as also reiterated in the decision of the Division Bench of the Gujarat High Court in the this Court in “New India Assurance Co.Ltd. Vs. Bhoyabhai Haribhai Bharvad” (supra) interpreting Section 194(3)(ix) of the Act, relevant in the present context. Thus, the reliance on behalf of the Petitioner on the decision of the learned Single Judge of the Madras High Court in “The New India Assurance Co.Ltd.Vs. Mani S.Nachimuthu, N.” and the decision in the case “Bikram Singh & Ors.Vs. Land Acquisition Collector & Ors.” 9 may not assist the Petitioner.”
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