Case BriefsHigh Courts

Jharkhand High Court: A Division Bench of H.C. Mishra and Deepak Roshan, JJ., allowed the present petition against the respondent authorities charging penalty on non payment of TDS, reiterating, “…only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that penalty must be levied in all situations.”

Background

Three writ applications bearing common issues were heard together by the present Court, with the facts mentioned as follows;

The petitioner Company was engaged in the production, supply and sale of electricity for which it purchased coal from the Central Coalfields Limited. As provided under Section 45(1) of the Jharkhand Value Added Tax Act, 2005, (hereinafter referred to as the ‘JVAT Act’), the petitioner Company was required to deduct 2% on account of VAT, as tax deducted at source (for short ‘TDS’), from the bills raised by the Central Coalfields Limited and by virtue of Section 45(3) of the JVAT Act, the same was to be deposited to the Government Treasury in the prescribed manner.

By virtue of Section 45(5) of the JVAT Act, if such TDS was not made, the Company was liable to pay by way of penalty a sum not exceeding twice the amount of the tax deductible under sub-Section (1). In all these matters, this obligation of deduction of TDS was not carried out by the petitioner Company, and accordingly, the impugned demand was raised by the Assessing Authority under the JVAT Act, imposing penalty as well as tax upon the petitioner. The assessment orders were passed on 19-03-2015, 05-03-2016 and 21-03-2017. However, by the said orders the liability imposed was not only for the penalty but also for the deductible 2% of the tax amount.

 Contentions

Counsel for the petitioner, submitted that the impugned assessment orders as also the consequent garnishee orders cannot be sustained in the eyes of law, in as much as, the VAT payable on the coal purchased has already been deposited by the petitioner Company to the CCL and the CCL, in turn, has deposited the tax in the State-exchequer. This is an admitted position and there is no revenue loss to the State-exchequer due to the non deduction of TDS by the petitioner at 2%. Further, it was submitted that since there was no revenue loss to the State Government, the petitioner Company was also not liable to any penalty. Reliance was placed on;

Hindustan Steel Ltd. v. State of Orissa, (1969) 2 SCC 627, wherein it was held by the Supreme Court, “An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so.

Employees’ State Insurance Corporation v. HMT Ltd., (2008) 3 SCC 35, re-emphasized the need and objective of imposing a penal liability, in the words, “Only because a provision has been made for levy of penalty, the same by itself would not lead to the conclusion that penalty must be levied in all situations.”

Nirlon Ltd. v. Commissioner of Central Excise, (2015) 14 SCC 798, where it was found that the entire exercise was revenue neutral and there was no mala fide intention on the part of the assessee, the penalty imposed was set aside.

Counsel for the State opposed the prayer and submitted that a plain reading of Section 45(5) of the JVAT Act would show that the provision is mandatory in nature and the Revenue Authorities had no way out, but to impose the penalty, once it was found that the TDS was not deducted by the petitioner Company. It was further submitted that Revenue Authorities had only limited discretion in deciding the quantum of penalty but so far as the imposition of penalty is concerned, the provision of the Act is mandatory. Reliance was placed on the following judgments, namely;

Guljag Industries v. Commercial Tax Officer, (2007) 7 SCC 269, wherein it was said, “…The penalty is for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty”

State of West Bengal v. Kesoram Industries Ltd., (2004) 10 SCC 201, “In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency”

 Observations

Quashing the impugned orders, the Court observed, “…a plain reading of the impugned assessment orders clearly show that the mandate of Proviso to Section 45(5) of the JVAT Act, has not been followed by the Assessing Authority. There is no discussion at all about the defence of the Company and without stating anything about the reasons that might have been shown before the Assessing Authority by the counsel for the Company, the assessment orders/demand notices have been passed…”

With regards to the precedents referred to by the Counsel for the petitioner, the Court said, “…The Assessing Authority shall pass the necessary orders in accordance with law, keeping in view the ratio of the decision in Hindustan Steel Ltd. case, that penalty is not ordinarily to be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation, and that the penalty is not to be imposed merely because it is lawful to do so. The Assessing Authority shall also take into consideration the ratio of the decision in Employees’ State Insurance Corporation case, that only because a provision has been made for levy of penalty the same by itself would not lead to the conclusion that penalty must be levied in all situations. The Assessing Authority shall also exercise its discretion, in accordance with law, as regards the quantum of penalty, if the penalty is found leviable, and shall not go for the highest amount of penalty in a mechanical manner.”

 Decision

Allowing the present three writ applications, the Court reiterated the settled legal precedents and further directed, “…in case the Assessing Authority comes to the finding that the penalty was not leviable, the amount already deposited by the petitioner Company pursuant to the garnishee orders shall be refunded back with the statutory interest.”[Tenughat Vidyut Nigam Ltd. v. State of Jharkhand,  2019 SCC OnLine Jhar 2908, decided on 05-12-2019]


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Case BriefsHigh Courts

Jharkhand High Court: Sanjay Kumar Dwivedi, J., dismissed the petition being devoid of merits.

The facts of the case are such that the Jharkhand State Aarogya Society issued an advertisement for appointment in different posts by way of walk-in-interview. The said appointment shall be a contractual appointment for a period of three years with the rider that on completion of three years, the review would be done of the work of the appointed persons and upon their being found to be satisfactory, their services shall be extended for the next year and if found to be unsatisfactory then after giving one month’s notice his service shall be terminated. The petitioner applied for the post of Senior Consultant (Finance) got a total of 45 marks which was found to be highest and was selected for the post. The petitioner received the appointment letter dated 15.10.2019 and was terminated vide letter dated 23-06-2020 even without completing one year. Aggrieved by the same, instant petition was filed for quashing the said termination order.

Counsel for the petitioner Rahul Kumar submitted that the impugned order is non-speaking and illegal. He further submitted that the order was issued without following clause-6 of the appointment letter which provides for one month’s notice before terminating the service of the employee, and has been issued without any show cause and hence is in violation of principles of natural justice and liable to be quashed.

Counsel for the respondents Salona Mittal submitted that the appointment letter categorically mentions that the appointments are being made for a period of three years subject to review of the performance every year and if the same is not found satisfactory, their services can be terminated.  It was further submitted that due to the negligence of the petitioner, the office of the respondents was levied with a penalty by the Income-tax Department for not filing TDS within time.  It was further submitted that the order was issued after following the due process of law as show cause dated 22-01-2020 was served.

The Court observed that there was no statutory rule requiring one month’s notice for termination by the respondents of the service of the petitioner but only the term of appointment order which stipulated for one month’s notice. The term contained in clause-6 of the appointment letter reads as under

 “On unsatisfactory contract of service termination can be made after providing a month’s notice.”

This nowhere suggests or indicates that non-service of one month’s notice as a condition precedent for termination of petitioner’s service would result in vitiation or invalidation of termination of service if effected.

The Court further relied on judgment Oriental Insurance Co. Ltd. v. T. Mohammed Raisuli Hassan, (1993) 1 SCC 553 and observed

“4. Admittedly, there was no statutory rule requiring one month’s notice for termination by the appellant of the service of the respondent. It is only the term of appointment order, which stipulated for one month’s notice or one month’s salary in lieu thereof by either side to bring an end to the service of the respondent, which is made the basis for claiming invalidation of termination. That term contained in clause 10 of the appointment order reads:

“10. This appointment is liable to b eterminated at any time by giving one month’s notice, in writing, on either side, or a month’s salary in lieu of notice, without assigning any reason.

Breach of this condition, will entitle the company to recover from you one month’s salary in lieu of notice.”

5. When the above term in the clause relating to the condition of service of the respondent with the appellant is seen as a whole, there is nothing to indicate or suggest, even remotely, that non-service of one month’s notice as a condition precedent for termination of the respondent’s service would result in vitiation or invalidation of termination, if effected. On the contrary, the second part of the term contained in the clause, “breach of this condition, will entitle the company to recover from you one month’s salary in lieu of notice” makes it obvious that the same would be the consequence if there was a breach of condition on the part of the company in the matter of service of one month’s notice before termination of the respondent’s service. Hence, we are constrained to hold that the non-service of one month’s notice in writing by the appellant to the respondent before terminating the latter’s service did not invalidate or vitiate such termination. From this, it follows that courts below had misread the said clause, by which either party was required to serve notice for putting an end to service of the respondent and consequently committed an apparent error in taking the view that non-service of one month’s prior notice to the respondent had vitiated the termination of his service.”

In light of the well-settled law in this aspect and the above authoritative pronouncement, Court held that the service of the petitioner was not being governed by any statutory but by the appointment letter wherein it was nowhere explicitly mention that non-service of one month’s notice in writing by the respondents to the petitioner before terminating the service of the petitioner will invalidate or vitiate such termination.

In view of the above, petition stands dismissed.[Chandrashekhar v. State of Jharkhand,  2020 SCC OnLine Jhar 838, decided on 06-10-2020]


Arunima Bose, Editorial Assistant has put this story together

Legislation UpdatesNotifications

Central Board of Direct Taxes in exercise of powers conferred under Section 138(1)(a) of Income Tax Act, 1961, has issued Order inF.No. 225/136/2020/ITA.II dated 31.08.2020, for furnishing information about IT Return Filing Status to Scheduled Commercial Banks, notified vide notification No. 71/2020 dated 31.08.2020 under sub-clause (ii) of clause (a) of sub-section (1) of Section 138 of the Act.

The data on cash withdrawal indicated that huge amount of cash is being withdrawn by the persons who have never filed income-tax returns. To ensure filing of return by these persons and to keep track of cash withdrawals by the non-filers, and to curb black money, the Finance Act, 2020 w.e.f. 1st July, 2020 further amended the Income-tax Act, 1961 to lower the threshold of cash withdrawal to Rs. 20 lakh for the applicability of TDS for the non-filers and also mandated TDS at the higher rate of 5% on cash withdrawal exceeding Rs. 1 crore by the non-filers.

Income Tax Department has already provided a functionality “Verification of applicability under Section 194N” on www.incometaxindiaefiling.gov.in for Banks and Post offices since 1st July, 2020.  Through this functionality, Bank/Post Office can get the applicable rate of TDS under Section 194N of the Income-tax Act, 1961 by entering the PAN of the person who is withdrawing cash.

The Department has now released a new functionality “ITR Filing Compliance Check” which will be available to Scheduled Commercial Banks (SCBs) to check the IT Return filing status of PANs in bulk mode. The Principal Director General of Income-tax (Systems) has notified the procedure and format for providing notified information to the Scheduled Commercial Banks. The salient features of the using functionality are as under:

  1. Accessing “ITR Filing Compliance Check”: The Principal Officer & Designated Director of SCBs, which are registered with the Reporting Portal of Income-tax Department (https://report.insight.gov.in) shall be able to use the functionality after logging into the Reporting Portal using their credentials. After successfully logging in, link to the functionality “ITR Filing Compliance Check” will appear on the home page of the Reporting Portal.
  2. Preparing request (input) file containing PANs: The CSV Template to enter PAN details can be downloaded by clicking on the “Download CSV template” button on the “ITR Filing Compliance Check” page. PANs, for which IT Return filing status is required, are required to be entered in the downloaded CSV template. The current limit of PANs in one file is 10,000.
  3. Uploading the input CSV file: Input CSV file may be uploaded by clicking on Upload CSV button. While uploading, “Reference Financial Year” is required to be selected. Reference Financial Year is the year for which results are required. If the selected Reference Financial Year is 2020-21 then results will be available for Assessment years 2017-18, 2018-19 and 2019-20. Uploaded file will start reflecting with Uploaded status.
  4. Downloading the output CSV file: After processing, CSV file containing IT Return Filing Status of the entered PANs will be available for download and “Status” will change to Available.  Output CSV file will have PAN, Name of the PAN holder (masked), IT Return Filing Status for last three Assessment Years. After downloading of the file, the status will change to Downloaded and after 24 hours of availability of the file, download link will expire and status will change to Expired.

Scheduled Commercial Banks can also use API based exchange to automate and integrate the process with the Bank’s core banking solution. Scheduled Commercial Banks are required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of information.


Ministry of Finance

Press Release dt. 02-09-2020 

COVID 19Legislation UpdatesNotifications

In view of the challenges faced by taxpayers in meeting the statutory and regulatory compliance requirements across sectors due to the outbreak of Novel Corona Virus (COVID-19), the Government brought the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 [the Ordinance] on 31st March, 2020 which, inter alia, extended various time limits. 

In order to provide further relief to the taxpayers for making various compliances, the Government has issued a Notification on 24th June, 2020, the salient features of which are as under:

I. The time for filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) has been extended to 31st July, 2020.

II. Due date for income tax return for the FY 2019-20 (AY 2020-21) has been extended to 30th November, 2020. Hence, the returns of income which are required to be filed by 31st July, 2020 and 31st October, 2020 can be filed upto 30th November, 2020. Consequently, the date for furnishing tax audit report has also been extended to 31st October, 2020.

III. In order to provide relief to small and middle class taxpayers, the date for payment of self-assessment tax in the case of a taxpayer whose self-assessment tax liability is upto Rs. 1 lakh has also been extended to 30th November, 2020. However, it is clarified that there will be no extension of date for the payment of self-assessment tax for the taxpayers having self-assessment tax liability exceeding Rs. 1 lakh. In this case, the whole of the self-assessment tax shall be payable by the due dates specified in the Income-tax Act, 1961 (IT Act) and delayed payment would attract interest under section 234A of the IT Act.

IV. The date for making various investment/ payment for claiming deduction under Chapter-VIA-B of the IT Act which includes section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations) etc. has also been further extended to 31st July, 2020. Hence the investment/ payment can be made upto 31st July, 2020 for claiming the deduction under these sections for FY 2019-20.

V. The date for making investment/ construction/ purchase for claiming roll over benefit/ deduction in respect of capital gains under Sections 54 to 54GB of the IT Act has also been further extended to 30th September, 2020. Therefore, the investment/ construction/ purchase made up to 30th September, 2020 shall be eligible for claiming deduction from capital gains.

VI. The date for commencement of operation for the SEZ units for claiming deduction under section 10AA of the IT Act has also been further extended to 30th September, 2020 for the units which received necessary approval by 31st March, 2020.

VII. The furnishing of the TDS/ TCS statements and issuance of TDS/ TCS certificates being the prerequisite for enabling the taxpayers to prepare their return of income for FY 2019-20, the date for furnishing of TDS/ TCS statements and issuance of TDS/ TCS certificates pertaining to the FY 2019-20 has been extended to 31st July, 2020 and 15th August, 2020 respectively.

VIII. The date for passing of order or issuance of notice by the authorities and various compliances under various Direct Taxes & Benami Law which are required to be passed/ issued/ made by 31st December, 2020 has been extended to 31st March, 2021. Consequently, the date for linking of Aadhaar with PAN would also be extended to 31st March, 2021.

IX. The reduced rate of interest of 9% for delayed payments of taxes, levies etc. specified in the Ordinance shall not be applicable for the payments made after 30th June, 2020.

The Finance Minister has already announced extension of date for making payment without additional amount under the “Vivad Se Vishwas” Scheme to 31st December 2020, necessary legislative amendments for which shall be moved in due course of time. The said Notification has extended the date for the completion or compliance of the actions which are required to be completed under the Scheme by 30th December, 2020 to 31st December, 2020. Therefore, the date of furnishing of declaration, passing of order etc under the Scheme stand extended to 31st December, 2020.

Deferment of the implementation of new procedure for approval/ registration/ notification of certain entities u/s 10(23C), 12AA, 35 and 80G of the IT Act has already been announced vide Press Release dated 8th May, 2020 from 1st June, 2020 to 1st October, 2020. It is clarified that the old procedure i.e. pre-amended procedure shall continue to apply during the period from 1st June, 2020 to 30th September, 2020. Necessary legislative amendments in this regard shall be moved in due course of time.

The Finance Minister has already announced reduced rate of TDS for specified non-salaried payments to residents and specified TCS rates by 25% for the period from 14th May, 2020 to 31st March, 2021. The announcement was also followed by the Press Release dated 13th May, 2020. The necessary legislative amendments in this regard shall be moved in due course of time.


Ministry of Finance

[Press Release dt. 25-06-2020]

Case BriefsHigh Courts

Madras High Court: In the instant case where the issue revolved around the applicability of TDS on interest in Motor Accident Claims; the Single Judge Bench of N. Anand Venkatesh, J., while observing that the issue has become complicated owing to the fact that there are conflicting decisions on the same, decided that the matter must be referred to a larger Bench for resolution and clarity, as all the stakeholders have serious interests requiring immediate attention.

As per the facts, the present appeal was filed against an award for Rs 10, 46,200 with interest at 9% p.a. from date of claim, in favour of the victim/ claimant who suffered grievous injury. The appellants drew the attention of the Court to their dilemma regarding the applicability of TDS under Section 194 A of the Income Tax Act, 1961. It was contended by the appellants that while satisfying the award, the interest liability would be subject to Tax Deducted at Source (TDS) under the aforementioned statutory provision. It was brought before the Court that the legal position in Tamil Nadu suggests that in cases where the insurer satisfies the award and deducts TDS, they face the prospect of attachment by way of execution petitions. On the other hand, if the insurer does not apply TDS, they run the risk of facing penalty under Section 201 of Income Tax Act, 1961. Therefore the appellants sought the guidance of the Court in getting them out of this “between the devil and the deep sea” situation and to make it clear as to which of the two courses they should embrace in this case.

The Court sought the assistance from R. Sankaranarayanan, V. Lakshminarayanan, M.B. Raghavan and N.P. Vijayakumar, all acting in the capacity of amicus curiae. The Court referred to it’s previous decision in New India Assurance v. Mani 270 (2004) ITR 394 Mad, where the order of attachment and direction to pay the TDS amount were set aside. Then in TNSTC v. Chinnadurai, 2016 SCC OnLine Mad 3494, ruled that TDS in Motor accident claims was inapplicable; however the Income Tax Department which had a vital interest in the issue was not heard in the case. The Court also took into consideration the decisions of other High Courts and pointed out that there was a lack of consistent application of the law. The Court noted the submissions made by the Income Tax Department counsel J.Narayanaswamy that there was no judgment of a larger bench on this tax issue and clarity is required with regard to the interpretation and applicability of Section 194 A, as it would help not only the claimants but also the respective insurance companies, other entities and also the Income Tax department for a consistent and uniform approach.

Observing the stakes involved and lack of uniformity in the application of Section 194 A, the Court was convinced that the matter needs to be resolved by a Larger Bench of this Court. The Court also put forth a suggestion for the Larger Bench to consider the changes introduced by the Parliament, in Chapter XI of the Motor Vehicles Act, 1988 for the benefit of the accident victims. Keeping in mind the peculiar circumstances of the case, the Court directed the insurance company to deposit the entire award sum without applying any TDS; and that all pending Execution Petitions in Tamil Nadu relating to issue of TDS under Section 194 A, irrespective of their stage, shall stand stayed to await orders from the larger bench on the issue.[Cholamandalam General Insurance Co. Ltd. v. M. Ashok Kumar, 2020 SCC OnLine Mad 1011, decided on 14-05-2020

COVID 19Legislation UpdatesNotifications

Due to outbreak of the Covid-19 pandemic, there is severe disruption in the normal working of almost all sectors. To mitigate the hardships of taxpayers, the CBDT has issued the following directions/clarifications by exercise of its power under Section 119 of the Income-tax Act, 1961 (the Act):

All the assessees who have filed application for lower or nil deduction of TDS/TCS for F.Y. 2020-21 and whose applications are pending for disposal as on date and they have been issued such certificates for F.Y. 2019-20, then such certificates would be applicable till 30.06.2020 of F.Y. 2020-21 or disposal of their applications by the Assessing Officers, whichever is earlier, in respect of the transaction and the deductor or collector if any, for whom the certificate was issued for F.Y. 2019-20. In cases where the assessees could not apply for issue of lower or nil deduction of TDS/TCS in the Traces Portal for the F.Y. 2020-21, but were having the certificates for F.Y. 2019-20, such certificates will be applicable till 30.06.2020 of F.Y. 2020-21.

However, they need to apply at the earliest giving details of the transactions and the Deductor/Collector to the TDS/TCS Assessing Officer as per procedure prescribed.

Further, on payments to Non-residents (including foreign companies) having Permanent Establishment in India, where the above applications are pending, tax on payments made will be deducted at the subsidised rate of 10% including surcharge and cess, on such payments till 30.06.2020 of F.Y. 2020-21, or disposal of their applications, whichever is earlier (Order passed on 31.03.2020).

In case of pending applications for lower/nil rate of TDS/TCS for F.Y. 2019-20, the Assessing Officers have been directed to dispose off the applications through a liberal procedure by 27.04.2020, so that the taxpayers may not have to pay extra tax which may cause liquidity issues to them (Order passed on 03-04-2020).

To mitigate the hardships of small taxpayers, it has been decided that if a person had submitted valid Forms 15G and 15H to the Banks or other institutions for F.Y. 2019-20, then these Forms would be valid up to 30.06.2020. This will safeguard the small tax payers against TDS where there is no tax liability (Order passed on 03-04-2020).

All the above orders passed under Section 119 of the Act are available on www.incometaxindia.gov.in  under the head Miscellaneous Communications.


Ministry of Finance

[Press Release dt. 04-04-2020]

Case BriefsHigh Courts

Bombay High Court: A Division Bench comprising of S.C. Dharmadhikari and B.P. Colabawalla, JJ. dismissed an appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal wherein it was held that Section 194-LA was not applicable in case at hand.

The facts of the case were that the assessee Development Authority had acquired land from hutment dwellers and paid compensation for rehabilitation. The Assessing Officer passed an order under Sections 201(1) and 201(1-A). He was of firm opinion that there had been acquisition of immovable property and the assessee, while compensating the hutment dwellers, was liable to deduct tax at source (TDS) as per the provisions of Sections 194-L and 194-LA. The assessees carried the matter in appeal before the Commissioner of Income Tax (Appeals) who held that the said sections were not applicable in the instant case. The decision was affirmed by ITAT. Aggrieved thus, the Revenue had filed the instant appeal.

The High Court perused the record and found that the order impugned did not require any interfere. The Court was of the view that the subject land always vested in the State. The hutment dwellers were encroaching squatters who had built illegal hutments on State land, they were trespassers. This being the case, there was no question of land being acquired by the assessee. It was an encroachment which was removed by the assessee and the encroachers were rehabilitated. This being the case, the Court was of the view that Sections 194-L or 194-LA had no application to the facts and circumstances of the case. The appeal was accordingly dismissed. [CIT v. Mumbai Metropolitan Regional Development Authority,2018 SCC OnLine Bom 2374, dated 06-09-2018]

Case BriefsHigh Courts

Himachal Pradesh High Court: A Single Judge Bench comprising of Vivek Singh Thakur, J. upheld the decision of the Commissioner directing the petitioner-insurer to pay the balance amount to the respondents-claimants, which was deducted as TDS from the compensation paid to the respondents.

The claimants claimed compensation under Section 3 of Employees’ Compensation Act for the death of the deceased who died in an accident while working as a conductor. The Commissioner allowed the claim of the respondents and awarded Rs 3,79,592.50 as compensation to the claimants along with interest. The insurance company deposited the amount as awarded; however, only after deducting 20% of the amount as Tax Deducted at Source (TDS). Subsequently, in the execution proceedings, the Commissioner ordered the attachment of properties of the insurer for the realization of the balance of amount not paid (amount deducted) by the insurer. Aggrieved by the same, the insurer approached the High Court.

The High Court perused the record and while referring to Section 194-A Income Tax Act 1961, noted that compensation awarded under Motor Vehicles Act or Employees’ Compensation Act in lieu of death of a person or bodily injury suffered in a vehicular accident, is a damage and not an income and cannot be treated as taxable income. Further, the interest paid on the amount of compensation is also a part of the compensation. The Court held that TDS deducted by the insurer on the compensation awarded to the claimants was illegal. Accordingly, Respondent 6, Income Tax Officer, was directed to return the TDS amount to the petitioner-insurer which was further directed to be passed on to the claimants. [National Insurance Company Ltd. v. Dil Kumari, 2018 SCC OnLine HP 665, dated 01-06-2018]