NAGAVVA W/O. ADVAYYA KALMATH V. UNION OF INDIA REP.BY.

WP/84726/2013

AI Insights

The case involves a writ petition filed by Nagavva, seeking a direction for the refund of TDS amounting to Rs.8,00,522 deducted from a compensation award by the Court of Senior Civil Judge, Dharwad. The petitioner argued that the compensation received was not liable to income tax and thus should not have been subjected to TDS. The Income Tax Department, however, could not trace the payment of the deducted amount to the Central Government's account, despite the cheque being issued and dispatched. The court examined the records and reports from the Senior Civil Judge and the District Treasury Office, which indicated that the cheque had not been encashed by the Income Tax Department. Consequently, the court disposed of the petition, allowing the petitioner to seek the release of the amount from the Senior Civil Judge's office.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 680167 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-03-2014
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: TALWAR SUBHAS
• Keywords: Cheque; Civil Judge; Income Tax; Income Tax Officer; Refund; TDS
• Section: TDS

Judgement Text

": 1 : IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 20TH DAY OF MARCH, 2014 BEFORE THE HON’BLE MR. JUSTICE ARAVIND KUMAR WRIT PETITION NO.84726/2013 [T-RES] BETWEEN: NAGAVVA W/O. ADVAYYA KALMATH AGE: 63 YEARS, OCC: HOUSEHOLD R/O. RAYNAL, TQ: HUBLI, DIST: DHARWAD. …PETITIONER [BY SHRI TALWAR SUBHAS, ADV.] AND: 1. UNION OF INDIA, REP.BY. COMMISSIONER FOR INCOME TAX, NAVANAGAR, HUBLI. 2. INCOME TAX OFFICER, WARD -I (3) CENTRAL REVENUE BUILDING NAVANAGAR, HUBLI 580 025 …RESPONDENTS [BY SHRI Y.V.RAVIRAJ, ADV.] THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENTS TO REFUND THE AMOUNT TO THE PETITIONER FOR WHICH SHE IS STATUTORILY ENTITLED WITH INTEREST. AS PER THE ORDER DATED 04.04.2006 OF DEDUCTING THE TDS TO THE TUNE OF Rs.8,00,522/- BY THE COURT OF II ADDITIONAL CIVIL (SR. DN.) DHARWAD IN EXECUTION NO.287/03 AS PER ANNEXURE – B. THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: : 2 : ORDER Heard Shri Subhash learned counsel appearing for petitioner and Shri Raviraj, learned standing counsel appearing for respondents 1 and 2. 2. Petitioner is seeking for a direction to respondents to refund the tax deducted at source by the Court of Senior Civil Judge, Dharwad in Execution No.287/2003 which has forwarded a cheque dated 04.04.2006 for Rs.8,00,522/- with interest on the ground that compensation awarded by the Reference Court is not liable to income tax being deducted at source. 3. Having heard the learned advocates appearing for parties and on perusal of records it would indicate that Civil Judge (Sr. Dn.), Dharwad had issued a cheque bearing No.140132 for Rs.8,00,522/- in favour of Income Tax Officer, Income Tax Department, Navanagar, Hubli dated 04.04.2006 and had forwarded the said cheque on 17.04.2006. This Court had : 3 : permitted the respondents to file an affidavit indicating as to whether said cheque have been despatched by the Jurisdictional Civil Court by way of TDS has been received by Income Tax Department and has been encashed by the Department or not. Pursuant to the same, an affidavit of Shri M F Timbare working as Income Tax Officer, Ward – I (3) Hubli, Dharwad District came to be filed on 05.03.2014 stating thereunder, that despite best efforts made, respondents are unable to trace out payment of the amount having been received which was claimed to have been credited to the Central Government account during the relevant period. It is also stated in the affidavit that detailed verification of the available records was made by the department and return of income filed by assessee is not supported by Form No.16A which is mandatory for considering any claim for refund in proof of deduction of TDS and payment of amount into the account of Central Government and particulars of the deductee. It is also further stated in the said affidavit by Income Tax Officer : 4 : that enquiries have been made by the department with State Bank of India, Dharwad as well as Hubli with whom Department is having Bank Accounts, as also Principal Senior Civil Judge and CJM, Dharwad to furnish necessary particulars of the amount of credit of the said TDS to the Account of Income Tax Department and such enquiry revealed that no such amount has been received. Department has also undertaken thereunder to refund the amount within two weeks if any proof by way of document is given either from the deductor, the treasury Office or Bank to the effect that amount has been credited to the account of Central Government. 4. In view of this categorical stand taken by the Income Tax Department about said amount of Rs.8,00,522/- having not been credited to the account of Central Government and the order sheet of the Executing Court indicating that cheque having been dispatched by the Registry of the Office of Senior Civil Judge and CJM, Dharwad and also certified copy of the : 5 : postal acknowledgment having been furnished by the learned counsel for petitioner along with present petition, the moot question that arouse before this Court was as to what is the status of said cheque? Hence, to ascertain this factual matrix, a report was called from the Additional Senior Civil Judge, Dharwad which had dispatched the cheque to Income Tax Department. Learned Judge has forwarded a report on 13.03.2014 to the Registry of this Court and it has been specifically stated in the said report as under: “With reference to the above subject, I write to submit that, Cheque bearing NO.140132, dated 04.04.2006 for Rs.8,00,522/- drawn in favour of ITO, Navanagar, Hubli has not been debited from CCD head of account of this Court.” 5. The report would also indicate that the cheque had been forwarded by the Registry of Senior Civil Judge, Dharwad to ITO, Navanagar and extract of the Tapal book at Sl. No.1198 also indicated that said cheque had been dispatched by Office of Civil Judge (Sr. : 6 : Dn.) Dharwad and postal acknowledgment produced indicated that Office of the Joint Commissioner, Income Tax Range, Hubli had received the said cheque on 07.04.2006 itself and the same not having been encashed would automatically indicate that amount is still lying with the Civil Judge (Sr. Dn.), Dharwad. The report dated 13.03.2014 would also indicate that said cheque has not been debited in the balance sheet of the account issued by District Treasury Office and the bankers have also certified to this effect. The report in this regard reads as under: “Since it is Court Cheque which is valid for only 15 days and as per date of issuance of cheque i.e., 04.04.2006, the said cheque has to be debited within 18.04.2006. The said Cheque has not been debited in the balance sheet issued by DTO, Dharwad for the month of April and May 2006. Copy of Balance Sheet, letters received from SBI, Dharwad and DTO, Dharwad are enclosed for your honors kind perusal.” 6. This would only indicate the statement of accounts, balance sheet, letter received by the Trial : 7 : Court from State Bank of India, Dharwad and Statement of Accounts issued by DTO, Dharwad that subject cheque has not been encashed by the Jurisdictional ITO for reasons best known. In fact, the District Treasury Office, Dharwad vide Communication dated 24.02.2014 addressed to the Manager, State Bank of India (Main), Dharwad has intimated that verification of the report/accounts of the said Office would indicate that subject cheque bearing No.140132 was not received from the Bank for accounting purpose in its office. These facts would indicate that subject cheque has not been encashed by the Jurisdictional ITO. In other words, the amount continues to be in the account of Senior Civil Judge Dharwad. Hence, reserving liberty to the petitioner to make necessary application to the said Court for release of the amount, this writ petition stands disposed of. 7. It is needless to state that in the event of such an application is made by the petitioner, said Court shall expeditiously considered at any rate within : 8 : four weeks from the date of filing of said application and pass necessary orders for refund of the cheque if found that income tax department has not encashed the cheque already issued by it. Though Shri Talwar Subhas made a valiant attempt to contend that petitioner would be entitled to interest for the delay period on account of petitioner having lost the land and compensation amount having not been paid to petitioner on time, I am not inclined to accept the said submission for the simple reason that petitioner was fully aware of the cheque having been despatched by the Registry of the Trial Court to the Income Tax Officer, Navanagar, Hubli way back on 27.04.2006 and undisputedly Execution Petition was pending before the said Court and petitioner is a party to it. Even after dispatch of the cheque i.e. on 07.04.2006 till 09.11.2010. (as per the available certified copy of the order sheet in Execution No.287/2003), which would indicate that petitioner was also aware of this fact namely the cheque deducting income tax at source and : 9 : forwarding the same to the Income Tax Officer, Navanagar, Hubli by the Civil Court was fully within the knowledge of petitioner, as on 16.06.2006 and subsequent dates thereof, no steps whatsoever was taken by petitioner and only in the year 2013 i.e., on 21.11.2013 after a period nearly 8 years, petitioner has approached this Court seeking issuance of mandamus. Thus, delay if any, is attributable to petitioner himself and as such, respondent – Department cannot be mulcated with interest for no fault of the officials of Income Tax Department. Hence, writ petition stands disposed of with these observations. Registry to communicate this order to Principal Senior Civil Judge & CJM, Dharwad forthwith. Ordered accordingly. Sd/- JUDGE Rsh "