1 2025:CGHC:16780 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WP227 No. 868 of 2019 1 - The Oriental Insurance C. Ltd. Branch Office Manendragarh Road, Tahsil And District Surguja, Chhattisgarh. Through Dy. Manager, T.P. Hub, T.P. Hub Office, The Oriental Insurance Co. Ltd. Rama Trade Centre, 1st Floor, Opp. Rajeev Plaza, Near Old Bus Stand, Bilaspur, Chhattisgarh. Pin-495001, District : Bilaspur, Chhattisgarh ... Petitioner(s) versus 1 - Siya Ram Sai S/o Modi Sai Aged About 46 Years R/o Village Kurdeg, Police Station And Tahsil Bagicha, District Jashpur, Chhattisgarh., District : Jashpur, Chhattisgarh 2 - Durgabai W/o Siyaram Sai Aged About 43 Years R/o Village Kurdeg, Police Station And Tahsil Bagicha, District Jashpur, Chhattisgarh., District : Jashpur, Chhattisgarh 3 - Riyazuddin S/o Jaan Mohammed Aged About 46 Years Occupation Agriculture And Tractor Operator, R/o Village Lamgaon, Police Station Batauli, Tahsil And District Surguja, Chhattisgarh. (Non-Applicant No.1, Owner), District : Surguja (Ambikapur), Chhattisgarh 4 - Ramvilas Paikra S/o Ramnath Sai Aged About 25 Years R/o Village Maini, Police Station And Tehsil Bagicha, District Jashpur, Chhattisgarh. (Non- Application No. 2/driver), District : Jashpur, Chhattisgarh 5 - Yaseen Khan S/o Yakub Khan, R/o Barejpara, Ambikapur, District Surguja, Chhattisgarh., District : Surguja (Ambikapur), Chhattisgarh 6 - The Branch Manager District Cooperative Land Development Bank Ltd. Branch Office Lundra, District Surguja, Chhattisgarh., District : Surguja (Ambikapur), Chhattisgarh ... Respondent(s) For Petitioner : Mr. Akash Shrivastava, Advocate For Respondent No. 3 : Mr. T.R. Chandrakar, Advocate 2 Hon’ble Shri Justice Rakesh Mohan Pandey Judgment On Board 09/04/2025 Heard. 1) The petitioner has challenged the order dated 30.07.2019 (Annexure P/7) whereby the petitioner/Insurance Company has been directed to deposit the amount of TDS which was deducted from the amount of compensation of Rs.52,386/- 2) The facts of the present case are that a claim case was filed under Section 166 of the Motor Vehicles Act before the Motor Accident Claims Tribunal Jashpur, District Jashpur (C.G.) bearing Motor Accident Claim Case No. 32/10 as in a motor accident, one Leela Say had died. 3) Learned Claims Tribunal vide award dated 01.10.2012 directed the Insurance Company to make payment of compensation in the tune of Rs.2,07,500/-/- along with interest @ 6% which was payable within a period of one month and thereafter penal interest @ 9% p.a. till its realization. The Insurance Company deposited the amount of compensation along with interest after deducting 20% TDS on the interest part i.e. Rs.52,386/-. An application was moved by the claimants to direct the Insurance Company to make payment of the TDS amount deducted by the Insurance Company and that application was allowed by the learned Claims Tribunal vide order dated 30.07.2019. Against that order, the petitioner/Insurance Company has filed this petition. 4) Learned counsel for the petitioner would submit that the provisions of sub-section (1) of Section 194A shall not apply to the provisions of Section 194A (3) (ixa) of the Income Tax Act, 1961 (for short ‘the Income Tax Act’) 3 which says that such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees. He would further submit that in the present case, the interest component is Rs.2,61,930/- and therefore, the Insurance Company rightly deducted 20% TDS and the learned Claims Tribunal has committed an error of law in passing the order dated 30.07.2019, whereby the petitioner has been directed to refund the amount of TDS. 5) On the other hand, learned counsel for the Claimants would oppose. He would submit that there are two claimants and the TDS part cannot be deducted from interest imposed upon the petitioner-company. 6) I have heard learned counsel for the parties and perused the documents on record. 7) From a perusal of the award, it appears that the learned Claims Tribunal vide award dated 01.10.2012 awarded compensation of Rs.2,07,500/- with interest @ 6% which was payable within a period of one month and thereafter penal interest @ 9% p.a. till its realization. On 06.12.2018, the TDS amount was deducted and thereafter, the amount of compensation was deposited along with the remaining interest component on 06.12.2018 and under protest, the petitioner has also deposited the TDS amount of Rs. 52,386/-. It appears that the petitioner deducted 20% TDS i.e. Rs.52,386 /- before making payment of compensation to the claimants. 8) Section 194A (3) (ixa) of the Income Tax Act reads as under: (3) The provisions of sub-section (1) shall not apply- 4 (ixa) to such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees .” 9) From a perusal of this Section, it is apparent that if the interest on the compensation amount awarded by the Claims Tribunal exceeds Rs. 50,000/-, it would be taxable. 10) In the present case, the interest component is Rs.2,61,930/- and if it is divided between two claimants, the share of one claimant would be Rs.1,30,965/- which is more than Rs.50,000/- and therefore, the Insurance Company has rightly deducted 20% TDS. 11) Taking into consideration the above-stated facts and relevant provisions of the Income Tax Act, this Court has no hesitation to hold that the learned Claims Tribunal has committed an error of law in directing the Insurance Company to refund the deducted TDS amount of Rs.52,386/-. Consequently, the order passed by the Claims Tribunal dated 30.07.2019 is hereby set aside and the present petition is allowed. However, the Claimants would be at liberty to take proper steps for the refund of the TDS amount. Sd/- (Rakesh Mohan Pandey) JUDGE Ajinkya