Kavya Shaji Vs Union of India (Kerala High Court)
Material Facts: The petitioners, children of late K.A. Shaji, sought a writ directing the respondents to return TDS deducted from interest earned on fixed deposits created from compensation awarded by the Motor Accidents Claims Tribunal (MACT), along with interest at 12%.
Following the death of their father in a motor accident on 01.08.2005, the petitioners and their mother filed O.P.(MV) No.373/2006 before the Motor Accidents Claims Tribunal, Ernakulam. The Tribunal awarded compensation and directed the Insurance Company to deposit specified amounts in the names of the petitioners, who were minors. Fixed deposits were created with the second respondent bank on 18.01.2011.
After attaining majority, the petitioners withdrew the deposits in 2021 and 2022 and found that TDS had been deducted from the interest accrued on the deposits for the relevant periods.
Procedural History
The petitioners filed the present writ petition seeking return of the TDS amount with interest and other appropriate reliefs.
Legal Issue(s)
Whether TDS could be deducted from the interest earned on bank fixed deposits created from compensation awarded by the Motor Accidents Claims Tribunal, in view of Section 194A(3)(ix) and (ixa) of the Income Tax Act.
Relevant Statutory Provisions
- Section 194A(3)(ix) of the Income Tax Act
- Section 194A(3)(ixa) of the Income Tax Act
Petitioners’ Submissions
