AYISHA Vs. NEW INDIA ASSURANCE COMPANY LTD

JUDGEMENT

(1.) This order of mine shall dispose of two writ petitions W.P. (C).No.8280 of 2013 titled as Ayisha v. The New India Assurance Company Limited and Others (first writ petition) and W.P.(C).No.17283 of 2021 titled as Sajitha and Others v. The manager, United India Insurance Co.Ltd. And Others (second writ petition) where the question involved is whether the income tax deducted on the interest received on the award is permissible or not.

(2.) In the first writ petition, petitioner, the widow of one Ahammed, who unfortunately died in a road accident, preferred O.P.(MV)No.2402/2006 before the Motor Accidents Claims Tribunal, Thrissur along with daughter and son. On the basis of evidence on record, learned MACT vide award dtd. 10/1/2013 assessed the compensation of Rs.3,01,000.00 with interest @ 8% from the date of petition till date of realization. Insurance Company accepted the amount but later on received a letter from the Senior Divisional Manager that the award of the Tribunal carrying interest is more than Rs.50,000.00 and until and unless the details of the PAN card are not furnished, the tax will be deducted at source at the rate of 20% instead of 10%.

(3.) In the second case, petitioners are claimants in O.P. (MV)No.1112/2018 claiming the compensation on account of death of Rajan, occurred on 5/2/2006. On the basis evidence on record, learned MACT vide award dtd. 28/4/2021 assessed compensation of Rs.22,77,500.00 with interest @ 8% from the date of the claim. Tribunal apportioned the total compensation in the ratio of 40:20:20:10:10 to the petitioners 1 to 5. 1stpetitioner was allowed to withdraw Rs.5.00 lakhs from the total corpus amount and the interest from the amount due to other petitioners will be less than Rs.50,000.00 per annum as explained in the tabulated form in paragraph 3 of the petition. Company called upon the petitioners to submit the copy of IT returns for the last two preceding financial years under Ss. 206AB and 206CCA of the Income Tax Act, 1961, as it accrued the interest exceeding Rs.50,000.00.