Wp(C)/11622/2006 Of K.s.venugopal v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 9TH DAY OF DECEMBER 2014/18TH AGRAHAYANA, 1936 WP(C).No. 11622 of 2006 (H) ---------------------------- PETITIONER(S): -------------------------- K.S.VENUGOPALAN, OPERATOR, TRAVANCORE COCHIN CHEMICALS LTD. RESIDING AT SHYAM NIVAS, KAYANTIKKARA, MUPPATHADOM P.O., ERNAKULAM DISTRICT. BY ADVS.SRI.B.RAMACHANDRAN SMT.JOLIMA GEORGE SMT.P.N.INDU RESPONDENT(S): ---------------------------- 1. INCOME TAX OFFICER, INCOME TAX OFFICE, I.S.PRESS ROAD, COCHIN - 18. 2. THE PERSONAL MANAGER, TRAVANCORE COCHIN CHEMICALS LTD., MANJUMMAL ERNAKULAM DISTRICT. ERNAKULAM DISTRICT. R, BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) R, BY ADV. SRI.JOSE JOSEPH, SC FOR IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).NO.11622/2006 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF DECLARATION FORM DATED 20.2.2006. EXT.P2: COPY OF FORM NO.12C DATED 20.2.2006. EXT.P3: COPY OF STATEMENT OF ACCOUNT OF HOUSING LOAN FROM UNIONBANK OF INDIA MANJUMMEL BRANCH FOR THE PERIOD OF 1.4.2005 TO31.3.2006. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.S. TO JUDGE A.K.JAYASANKARAN NAMBIAR, J.------------------------------- W.P.(C).NO.11622 OF 2006 (H) -----------------------------------Dated this the 9[th] day of December, 2014 J U D G M E N T The petitioner is an assessee under the Income Tax Act, 1961.He is also an employee of the Travancore Cochin Chemicals Limited.It is the case of the petitioner that he had availed a loan from theUnion Bank of India in an amount of Rs.5 lakhs in the year 2002. Asper the terms of the loan agreement, he was obliged to effectrepayment of Rs.4,400/- every month for a period of 20 years. It is hiscase that while, initially, his employer, namely, the Travancore CochinChemicals Limited was taking into consideration the payments madeby him every month towards repayment of the loan amount, whilededucting tax at source from the payments made to him, from 2006onwards the said employer began to deduct tax at source on theentire amount paid to him by way of salary. This was pursuant to aninstruction received by the employer, that the petitioner was notentitled to a deduction in respect of the amounts paid by him by wayof monthly repayments since the house was in the joint names of thepetitioner and his wife, and the facility for deduction of the repayment amounts from the taxable income was available only if the houseconstructed using the loan amount was in the name of the petitioneralone. It was aggrieved by the action of the employer, in deductinghigher amounts at source from the payments made to the petitioner,that he approached this Court through the present writ petitionseeking inter alia a direction to the respondents to assess thepetitioner for income tax only after deducting the monthly instalmentsrecovered from the salary of the petitioner towards housing loanrepayment. 2. A statement has been filed on behalf of the 1[st] respondentwherein it is pointed out that the deduction of tax at source in a loweramount can be permitted only if the petitioner is entitled to thebenefit of exemption under Section 80C (2) (xviii) of the Income TaxAct. In the case of the petitioner, it is contended, that he was notentitled to the benefit of deduction under Section 80C (2) (xviii) and itwas under those circumstances that the employer was obliged todeduct tax on the entire payments effected to the petitioner by way ofsalary. 3. I have heard Sri.B.Ramachandran, the learned counselappearing on behalf of the petitioner as also Sri.Jose Joseph, thelearned Standing counsel appearing on behalf of the Income TaxDepartment. 2. A statement has been filed on behalf of the 1[st] respondentwherein it is pointed out that the deduction of tax at source in a loweramount can be permitted only if the petitioner is entitled to thebenefit of exemption under Section 80C (2) (xviii) of the Income TaxAct. In the case of the petitioner, it is contended, that he was notentitled to the benefit of deduction under Section 80C (2) (xviii) and itwas under those circumstances that the employer was obliged todeduct tax on the entire payments effected to the petitioner by way ofsalary. 3. I have heard Sri.B.Ramachandran, the learned counselappearing on behalf of the petitioner as also Sri.Jose Joseph, thelearned Standing counsel appearing on behalf of the Income TaxDepartment. 4. On a consideration of the facts and circumstances of the caseas also the submissions made across the Bar, I note that this is a casewhere the employer of the petitioner was obliged, in terms of theIncome Tax Act, to deduct tax at source on payments effected to thepetitioner by way of salary. The petitioner has a definite case that inthe initial period after availing the loan, the employer had deductedlesser amounts by way of tax deducted at source from paymentseffected to the petitioner and that this was done taking note of thefact that the petitioner would be entitled to a deduction in respect ofthe amounts paid by him towards monthly repayment of the loan tothe bank. It would appear that, thereafter, the employer began todeduct tax at source on the entire payments made to the petitioner byway of salary. This was because the eligibility of the petitioner toclaim deduction in terms of Section 80C (2) (xviii) was held to bedoubtful, in view of the fact that the house that was constructed using the loan was in the joint names of the petitioner and his wife.Whatever may be the treatment given to the claim for deduction in theassessment of the petitioner under the Income Tax Act, in the writpetition, the grievance is with regard to the deductions effected by theemployer in terms of the Income Tax Act, while effecting payments tothe petitioner by way of salary. The said deductions, by way of taxdeducted at source, are made by the employer pursuant to hisobligation under the Income Tax Act and, whatever tax is deducted atsource is credited to the account of the Income Tax Department andthe said payments would be given credit to while completing theindividual assessment of the petitioner. In that view of the mattertherefore, if any amount has been deducted in excess from thepayments effected to the petitioner, the petitioner is not seriouslyaggrieved because he would get credit of the same in his assessmentunder the Income Tax Act. Thus, while I see no reason to grant anyrelief as sought for by the petitioner in the present writ petition andtherefore, dismiss the same, I make it clear that, if any deductionshave been effected by the employer by way of tax deducted at sourceunder the Income Tax Act, and the amounts credited to the IncomeTax Department, then the Department shall take this fact into account while completing the assessment of the petitioner under the IncomeTax Act. In the said assessment of the petitioner, if it is found thatexcess amounts have been deducted from the payments made to thepetitioner, which are in excess of his tax liability under the IncomeTax Act, then the excess amount of tax collected from the petitioner,shall be refunded to him. A.K.JAYASANKARAN NAMBIAR JUDGE prp