KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACADU THIRUVANANTHAPURAM APPEAL NO: 801/2006 JUDGMENT DATED:24..04..2010. PRESENT SMT. VALSALA SARANGADHARAN : MEMBER SRI. M.V. VISWANATHAN : JUDICIAL MEMBER SRI.S. CHANDRAMOHAN NAIR : MEMBER M/s Dhanasakthi Chitties & Loans (P) Ltd., R/by Chairman, P.O.Kanjany – 680 612, Thrissur (Dist). : APPELLANT (By Adv: Sri.George Cheriyan Karippaparambil) Vs. Mr.T.A. Paul, S/o T.A.Antony, Thanikkal Chammanath House, : RESPONDENT P.O.Kanjany, Thrissur (Dist). (By Adv: Sri.Jagadeeshkumar) JUDGMENT SHRI.M.V. VISWANATHAN : JUDICIAL MEMBER The above appeal is preferred against the order dated:10th October 2006 passed by CDRF, Thrissur in OP:522/04. The complaint therein was preferred by the respondent herein against the appellant/opposite party/Dhanasakthi Chitties and Loans (P) Ltd for getting refund of Rs.55,125/- which was deducted by the appellant/opposite party towards the income tax to be deducted at source. The complainant claimed refund of the aforesaid amount with compensation and cost on the ground of deficiency of service on the part of the appellant/opposite party in deducting the said amount by way of income tax. The opposite party entered appearance and contended that it was bound to deduct income tax by virtue of section.194(B) of the Income Tax Act read with the explanation to Sec.2(24) of the Income Tax Act inserted by the Finance Act, 2001. Thus, the opposite party prayed for dismissal of the complaint with cost. 2. Before the Forum below Exts.P1 and P2 documents were marked on the side of the complainant and Exts.R1 to R9 on the side of the opposite party. On an appreciation of the documentary evidence, the Forum below passed the impugned order dated:10th October 2006 directing the opposite party to refund Rs.55,125/- to the complainant with interest at the rate of 12% per annum from 17/5/2002 till realization and cost of Rs.1000/-. Aggrieved by the said order, the present appeal is filed by the opposite party therein. 3. When this appeal was taken up for final hearing, there was no representation for the respondent/complainant. We heard the learned counsel for the appellant/opposite party. He submitted his arguments based on the grounds urged in the memorandum of the present appeal and argued for the position that the sum of Rs.55,125/- was deducted by way of income tax and the said amount was remitted to the Government and that the complainant was also informed of the same from the very beginning. He also relied on Exts.R1 and R4 letter specifying the provision for deduction of income tax and sales tax in the event of winning of the bonus prize. He also relied on the judgment rendered by this commission in A:688/03 and submitted that the impugned order passed by the Forum below is liable to be quashed. 4. The points that arise for consideration are:- 1. Whether there was any deficiency of service on the part of the appellant/opposite party in deducting the income tax amount of Rs.55,125/- at source on the strength of Sec.194 B of the Income Tax Act read with the explanation to Sec.2(24) of the Income Tax Act? 2. Whether the Forum below can be justified in directing the opposite party to refund the income tax deducted at source with interest and cost? 3. Is there any sustainable ground to interfere with the order passed by the Forum below? 5. Point Nos: 1 to 3:- There is no dispute that the respondent/complainant joined the kuri which was commenced on 11/11/1999 and that the appellant/opposite party/M/s Dhanasakthi Chitties and Loans Pvt. Ltd. was the Foreman of the said kuri. As per the scheme introduced by the appellant, a lot was taken on the 31st instalment of the said kuri to give the bumper prize to one of the subscribers; Thereby the respondent/complainant got the bumper prize of Rs.1,80,000/- for purchasing a Maruthi Car. The appellant deducted the income tax on the said amount of Rs.1,80,000/- by virtue of the provisions of Sec.194 B of the income tax read with the explanation to sec.2(24) of the Income Tax Act. 6. The explanation to sec.2(24) of the Income Tax inserted by the Finance Act, 2001 clarified the term lottery. It was made it more clear that any person getting the prize by draw or lots or by chance or income in any other manner is to be treated as the person who won the prize in a lottery. A reading of sec.194 B of the income tax would make it clear that the person responsible for paying to any person any income by way of winning from any lottery or crossway puzzle exceeding Rs.50,000/- has to deduct income tax at the rate in force, at the time of payment of the said amount or prize. The aforesaid reading of Sec.194 B read with explanation to Sec.2(24) of the Income Tax would make the appellant-liable to deduct income tax on the said prize amount of Rs.1,80,000/-. If that be so, the deduction of the said amount by way of income tax can only be justified. It is too much on the part of the respondent/complainant to allege that there was deficiency of service on the part of the appellant/opposite party in deducting the income tax due to the Central Government. 7. The documentary evidence adduced from the side of the opposite party would make it clear that the complainant/subscriber was made known about the liability to pay income tax on the bonus prize. Even in R1 pamphlet which was issued even prior to the commencement of the kuri it is stated that Sales tax and Central tax will be deducted from the bonus price. In Ext.R4 letter dated:15/5/2002 it was specified that the income tax is liable to be deducted from the bonus price amount. It is further to be noted that the respondent/ complainant issued R6 letter dated 12/8/2003 requesting for TDS certificate in Form No:16-A for the purpose of submitting income tax return and to get the benefit in paying the income tax. R7 certificate would also show that the said amount of Rs.55,125/- was deducted at source and the same was remitted to the income tax department. R8 Form No:16-A would also make it clear that the said deduction was made by remitting the same in State Bank of India, Thrissur. It is also to be noted that the complainant received the balance prize amount without raising any objection. The said amount was received by the complainant in May 2002 and the present complaint has been filed after more than one year. The circumstance would make it clear that the appellant/opposite party was bound to deduct the income tax from the prize amount and that the appellant has also remitted the deducted amount in the Income Tax Department. R5 letter dated:16/3/1999 would make it clear that the Income Tax Department was insisting the appellant to deduct the income tax on the prize amount. The appellant/opposite party has rightly deducted Rs.55,125/- by way of income tax. There cannot be any deficiency of service on the part of the appellant/opposite party in deducting the said amount by way of income tax. 8. The finding of the Forum below that there was no consideration for the draw and so the bonus prize obtained by the complainant cannot be treated as the prize won in lottery. It is to be noted that the joining in the said kuri and the payment of the subscription to the said kuri can be treated as the consideration. It is further to be noted that the appellant canvassed the complainant and other subscribers by offering the aforesaid bonus prize and that only because of that offer the complainant and other subscribers were attracted for joining the kuri. More over, the payment of the subscription to the said kuri can also be taken as a form of consideration. The mere fact that even without the draw the subscriber was bound to pay the kuri subscription cannot be taken as aground to hold that the payment of subscription cannot be a consideration for the draw. It is pertinent to note that to participate in the draw the person must be a subscriber of the said kuri and he must have paid the subscription within the stipulated time. The joining of the kuri and payment of the subscription can also form the consideration for the draw. 9. By relying on the decision rendered by Hon’ble Supreme Court in H.Anraj Vs. Government of Tamilnadu (1986) 61 SIC 165, the Forum below has held that for constituting a lottery the following 3 elements are must. 1. A prize or some advantage in the nature of a prize. 2. Distribution by chance. 3. Consideration paid or promised. We have already discussed the consideration aspect for the said lottery. There can be no doubt that by the draw the prize in the form of bonus prize has been awarded. It is further to be noted that the complainant who participated in the said draw won the bonus prize on the 31st instalment of the chitty. It is also to be noted that there was an element of chance in getting the said bonus prize. It can very safely be concluded that the bonus prize was obtained or distributed to the complainant by chance. So, all the 3 elelments were there for the draw in which the complainant won the winning prize of bumper bonus prize. The explanation to Sec.2(24) would make it clear that by getting the prize by draw of lots or by chance or in any other manner is to be treated as winning of the prize in a lottery. Thus, in all respects the appellant/opposite party is perfectly justified in deducting Rs.55,125/- by way of Income tax from the prize amount of Rs.1,80,000/-. 10. The appellant/opposite party had already deducted the said sum of Rs.55,125/- by way of income tax and the said amount has already been remitted to the Income Tax Department. The aforesaid amount was remitted by way of income tax due from the complainant who won the prize in the draw. The complainant can very well approach the Income Tax Department to get the refund of the said amount. It is to be noted that the appellant/opposite party has no locustandi to claim refund of the said amount from the Income Tax Department. If the complainant is of the view that he is not liable to pay income tax on the prize amount of Rs.1,80,000/-, he can very well approach the Income Tax Department to get refund of the same. The Forum below cannot be justified in directing the opposite party to refund the said amount of Rs.55.125/- which was already remitted by the appellant/opposite party to the Income Tax Department. So the impugned order passed by the Forum below is liable to be quashed. Hence we do so. These points are answered accordingly. In the result the appeal is allowed. The impugned order dated:10/10/2006 passed by CDRF, Thrissur in OP:522/04 is set aside. The parties are directed to suffer their respective costs. M.V. VISWANATHAN : JUDICIAL MEMBER VALSALA SARANGADHARAN : MEMBER CHANDRAMOHAN NAIR : MEMBER VL. | 
