NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Airport Authority of India
E.A. NO. 10 OF 2008
ORIGINAL PETITION NO. 81 OF 2001
AUGUST 14, 2012
Justice J.M. Malik, Presiding Member – The key controversy revolves around the question, “Whether the T.D.S. is deductible on the compensation paid to the unfortune parents, whose child dies in an escalator maintained by an Airport Authority”. This Commission vide its order dated 5.8.2004 allowed the complaint of the complainants/decree holders and directed the opposite party No. 1(AAI) to pay Rs.2,50,000/- French Francs or its equivalent in Rupees alongwith interest @10% per annum from January 1, 2000 till the date of payment. The appeal was preferred before the Hon’ble Supreme Court, which was also dismissed on 31.1.2008. Thereafter, the instant execution petition was filed.
2. The said compensation was granted because the young child Jyotsna Jethani met with a horrifying accidental death while getting out of escalator maintained by Airport Authority of India (AAI). Some amount was shown to have been deducted towards TDS. It was contended that opposite party No. 1 is not entitled to deduct the said amount towards TDS. As per the decision of the Supreme Court in the case of Haryana Urban Development Authority v. Dev 2005 (9) SCC 497. During the pendency of this case, it also transpired that the opposite party, Airport Authority of India contended that once the TDS has been deducted, the opposite party, Airport Authority of India, is left with no option over the amount and the complainant can seek the refund of the same from the concerned authority.
3. Consequently, notice was issued to the opposite party-Income Tax authority. Smt. Shashi Bala, Inspector, Income Tax appeared on behalf of Income Tax Authority.
4. We have heard the learned counsel for the parties and Smt. Shashi Bala, Inspector, Income Tax. She has invited the attention of the Commission towards Section 41 clause (1) part VIII which deals with ‘Refunds’. Rule 41(1) is reproduced as follows:-
“41.(1) A claim for refund under Chapter XIX shall be made in Form No. 30.
(2) The claim under sub-rule (1) shall be accompanied by a return in the form prescribed under Section 139 unless the claimant has already made such a return to the [Assessing Officer].
She also invited our attention towards Form No. 30 under Rule 40 (1) and (2).
FORM NO. 30
[See rule 41]
Claim for refund of tax
I ____________________________,of________________ do hereby state that my total income computed in accordance with the provisions of the Income-tax Act, 1961, during the year ending on ________being the previous year for the assessment year commencing on the 1st April,________, amounted to Rs.________; that the total income-tax chargeable in respect of such total income is Rs.________ and that the total amount of income-tax paid, or treated as paid under Section 199, is Rs.________
I, therefore, request for a refund of Rs.__________
I hereby declare that I was resident/resident but not ordinarily resident/non resident during the previous year relevant to the assessment year to which this claim relates and that what is stated in this application is correct.
1. The claim should be accompanied by a return of income in the prescribed form unless the claimant has already made such a return to the [Assessing Officer].
2. Persons who are non-resident and whose total income is made up only of income taxed at source should make the claim for refund to the [Assessing Officer], Non-resident Refund Circle, Bombay.
She contended that even for NRI, so far recovery of TDS is concerned, he will have to file a return.
5. All these arguments have to be eschewed out of consideration. First of all the respondent should not have deducted the T.D.S. An information to the Income Tax Authority would suffice. In the instant case, the compensation is by way of damages. The damages paid for the death of a person cannot be equated with income as such. The ratio of the following authority applies to this case on all fours. In Ghaziabad Development Authority v. Dr. N. K. Gupta 2002 INDLAW NCDRC 189 wherein it was held as follows:-
“It would, therefore, appear to us that the provisions of the Land Acquisition Act where interest is payable under Sections 28 and 34 and tax is deducted at source under section 194A of the Income-tax Act would not apply in the present case where the GDA has been asked to pay interest on the amount refunded to the complainant because of its failure to construct the promises flat and to prive necessary facilities. The amounts which were paid to the GDA by the complainant were not paid by way of any deposit or the GDA had not borrowed that money. And, as a matter of fact, interest as defined in clause (28) of Section 2 of the Income Tax Act is not that interest as was directed to be paid to the complainant by the GDA. Interest to the complainant (here Dr. Gupta) has not been awarded on the basis of any deposit made by the complainant or the GDA being the borrower of any money of the complainant. Here interest payment is by way of damages. Merely describing the damages as by way of interest does not make them as interest under the Income-tax Act.
A similar question arose before the Income-tax Appellate Tribunal in the case of Delhi Development Authority v. ITO 1995 53 ITD 19 (Delhi), and the Appellate Tribunal held that the amounts credited in the accounts of the allottees were not in the nature of interest within the meaning of section 2(28A) of the Income-tax Act and the Appellate Tribunal quashed the orders of those authorities and directed that what is recovered by the DDA be refunded. The Appellate Tribunal also hoped that the DDA will be equally quick in paying back the amounts it recovered from the allottees. It appears to us that the Revenue authorities did not challenge this order of the Appellate Tribunal by making reference to the High Court under Section 256 of the Income-Tax Act. The Appellate Tribunal held that the amounts paid/credited to the allottees by the DDA under SFS (Self-Finance Scheme) did not fall under any category in section 2(28A) of the Income-tax Act, but represented measure for quantifying compensation for delay in construction and handling over possession of dwelling unit which was in the nature of non-taxable capital income. In coming to this conclusion the Appellate Tribunal relied on various judgments including that of the Supreme Court in the case of Dr. Shamlal Narula v. CIT 1964 Indiaw SC 263.
In our view, therefore, considering the definition of “interest” as contained in Section 2(28A) of the Income-tax Act, the provisions of section 194A were not applicable and the GDA was clearly wrong in deducting the tax deducted at source from the interest payable to the complainant. Accordingly, the order of the State Commission is upheld and this revision petition is dismissed.
6. Consequently, the opposite party-Airport Authority of India Ltd. is directed to pay the TDS amount alongwith interest @9% p.a. to the Decree Holder, within a period of 30 days. The OP is directed to recover the said amount form the Income Tax Department, as per law.