ORDER

For the Complainant             Mr Rahul Kripalani, Advocate with

                                        Mr Aditya Pratap S Chauhan, Advocate

For the Opposite party         Mr Himanshu Chugh, Advocate with

                                        Authority Letter

ORDER

1.     Vide order in Madhav Joshi vs Vatika Limited, CC no. 277 of 2019 dated 08.12.2021 this Commission had ordered as under:

11. In the light of the above discussion, we find, both, Deficiency in Service within the meaning of section 2(1) (g) & (o), and Unfair Trade Practice within the meaning of section 2 (1) (r), to be well and truly evident on the part of the Opposite Party since the Opposite Party did not refund the aforesaid amount in immediately despite letter from the Complainant dated 9.4.2018 for the cancellation. In remedy, it would be just and equitable to direct the Builder Co. to pay compensation to the Complainants. The Opposite Party is directed to refund the amount after deduction of 10% which received from the Complainants along with compensation in the form of simple interest @ 9% p.a. from the 9.4.2018 i.e. the date of request for the cancellation from the complaint. The aforesaid direction shall be complied with within a period of four weeks from today, failing which the amount shall carry interest @ 12% p.a. till its realization.

2.     The short issue raised by the appellant in this EA is that while the order in CC no. 277 of 2019 has been complied with and that the respondent has deducted an amount of Rs.2,54,768/- towards TDS. It is contended that the TDS is not deductible on the amount being refunded and that the respondents/ judgment debtor has acted contrary to the settled law in this regard. Reliance has been placed on ‘Parsvnath Developers Limited vs Rajesh Kumar Agrawal (Civil Appeal nos.11248 – 11249 of 2016 dated 11.09.2017).

3.     Learned counsel for the judgment debtor submits that TDS had been deducted and the TDS certificate submitted while complying with the order in question.

4.     The issue of deduction of TDS in the matters of refund has been considered by a Coordinate Bench of this Commission in New Park Elite Welfare Association vs BPTP Ltd., and Anr., while deciding a batch of Execution Application nos. 225 of 2020, 58 of 2019, 10 of 2018 in Consumer Complaint nos. 1395 of 2016, 628, 1108 of 2017, 1501 of 2018 and AE no.49 of 2021 decided on 21.02.2024 which had considered the issue of whether income tax was deductible on the compensation being awarded and it has been held as under:

16. We are conscious of the fact that the deductee can approach Income-tax Authorities for certificate of lower or no TDS, and also that if the TDS gets wrongly deducted, claim refund by filing return of income. But it is unnecessary harassment of a consumer, which has already been harassed by the developer. If income-tax is not chargeable on compensation, then the developer cannot be permitted to deduct TDS. Therefore, deduction of income-tax at source under Section 194A while paying the compensation by the builder has no basis, authority or requirement in law. Therefore, we answer the question in the negative.

5.     In view of the foregoing, the deduction of the TDS by the respondent while making payment of compensation is held to be unjustified. The complaint is, therefore upheld. The judgment debtor is directed to refund the amount of Rs.2,54,768/- deducted towards TDS by it in view of this Commission’s judgment in New Park Elite Welfare Association (supra) and to remit the same to the appellant within six weeks of this order failing which the amount shall be repaid with interest @ 12% from the date it was deducted till realisation. No order as to costs.

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SUBHASH CHANDRA

PRESIDING MEMBER

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DR. SADHNA SHANKER

MEMBER