COMPLAINT FILED ON: 16.08.2010
DISPOSED ON: 11.03.2011
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)
11TH MARCH 2011
PRESENT :-SRI. B.S.REDDY PRESIDENT
SMT. M. YASHODHAMMA MEMBER
SRI.A.MUNIYAPPA MEMBER
COMPLAINANT | Smt. S.K.Vidya, No.112, 3rd Cross, Bhuvaneswarinagar, BSK 3rd Stage, Kathriguppe, Bangalore-560 085. In person V/s. |
OPPOSITE PARTIES | 1. The Commissioner, Income Tax (Salary ward) HMT Bhavan, Bellary Road, Bangalore. Exparte 2. The Chief Manager, Office Administration Department, State Bank of Mysore, Head Office, K.G.Road, Bangalore-09 Advocate: Varadaraj R.Havaldar |
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O R D E R
SMT. M. YASHODHAMMA, MEMBER
This is a complaint filed u/s. 12 of the Consumer Protection Act of 1986 by the complainant seeking direction against the Opposite Parties (herein after called as O.P) for refund of Income Tax refund of Rs.2,30,000/- along with interest at the rate of 12% p.a. from 16.05.2007 till payment of Rs.55,200/- and expenses of Rs.10,000/- towards visits to IT department and innumerable telephone calls made to bank on the allegations of deficiency in service.
2. The brief averments made in the complaint are as follows:
On 30.04.2007 complainant took retirement voluntary from the services of OP 2. At the time of retirement complainant was given an ex-gratia of Rs.9,94,376/- which is exempted from income tax u/s. 10AA. Copy of Form 16 along with IT return is produced on 26.11.2007 complainant had submitted form 10 E under rule 21AA. OP-2 administration department ought not to have deducted the income tax as per the annexure-3. OP-2 has deducted the tax at source and kept it as a fixed up to 07.04.2008 and remitted the same to Income Tax authorities on 07.04.2008 which is complete violation of IT guidelines. Form 16 produced clearly indicates that complainant is not entitled to pay tax. Still OP-2 has deducted the tax and put the complainant in great difficulty as a major chunk part of her ex gratia is deducted as tax. This act of OP-2 in knowing fully well that it should not deduct the tax, by deducting the same have put the complainant into lots of hardship. Complainant vide her letter dated 06.11.2007 requested OP-2 not to deduct the tax but they have done so just for their convenience. Though complainant had filed income tax return both electronically and manually as per the income tax stipulations and requested for refund of the same right from November 2008 her written and personal requests have gone on deaf ears. OPs are under obligations to refund excess income tax paid within 3 months on filing the income tax return. Complainant visited Income Tax Department personally for about 8 times. As a result she got assurances from both Mr.Konnur, ITRO 15 (1) and Arulappa ITRO (appeals) stating it would be credited to her account by 05.02.2008. They were asked the complainant to submit the revised returns in the place of original filed on 27.06.2008. Hence on 21.12.2009 complainant has submitted the revised returns as per the annexure-3. The repeated requests made by the complainant did not yield any solution. Complainant being retired Officer without any income facing hard to run her day to day life. Hence complainant felt deficiency in service. Under these circumstances she is advised to file this complaint for the necessary relief’s.
3. After registration of the complaint notice is issued to OP-1 and 2. Inspite of service of notice OP-1 remained absent without any sufficient reason or cause. Hence OP-1 is placed ex-parte.
4. On appearance OP-2 filed its version contending that complaint filed by the complainant in respect of alleged deduction of tax at source made in the year 2007 is barred by limitation. Hence complaint is liable to the dismissed with costs; Complaint does not involve the element of quid pro quo between this OP and the complainant. There is no relationship of consumer and service provider as between the complainant and OP. Therefore there cannot be any question of deficiency of service on the part of OP-2. Hence complaint is not maintainable. Complainant was an official of OP and retired from service of the OP on 13.04.2007 under ‘Exit Policy’ of the Bank, circulated to the staff and officials of the Bank vide circular No.011/2006-2007 dated 24.06.2006. Such Exit Policy scheme of the Bank clearly stipulate that as the said scheme does not comply with Rule 10 (10c) of the Income Tax Act, 1961 no benefit of exemption of ex gratia from Income Tax is intended in this scheme. Further Income Tax at source would be deducted wherever applicable. Leave encashment, payment of gratuity, provident fund as well as commuted value of pension are exempted. Complainant opted for retirement under the said scheme after fully understanding the implications of the same. In such circumstances the complainant cannot be considered as a consumer within the meaning C P Act of 1986. Therefore this Hon’ble Forum has no jurisdiction in the matter. Complainant voluntarily took retirement from the services of the Bank under the said Exit Policy scheme which required deduction of tax at source; it is preposterous on the part of the complainant to contend that this OP has committed deficiency of service. OP submits that employees of the bank who took retirement under Exit Policy scheme approached the Hon’ble High Court of Karnataka, Bangalore by filing writ petitions; same were dismissed by the High Court under various orders. In Writ Appeal No. 1264 of 2007 (SR) the Division Bench of the High Court vide order dated 23.03.2007 disposed of the writ appeal on the inter alia on the following terms:
a) The impugned order of the learned Single Judge is set-aside.
b) The appellants are given liberty to file applications u/s. 89 and 197 of the Income Tax Act before the Appropriate Authority within two weeks from today.
c) If such applications are filed by the appellants u/s. 89 or section 197 the appropriate authority under the Income Tax Act shall take a decision in accordance with law and pass appropriate orders and issue necessary certificate to the appellants within one month.
d) If the appellants bring to the notice of the respondents 1 to 3 that applications u/s. 80 or 197 of IT Act have been filed before appropriate authority in compliance with this order the respondents 1 to 3 shall not deduct at source any amount payable to the appellants as ex-gratia amount on account of their voluntary retirement from service until the orders passed by the appropriate authority under the Income Tax are made available to the respondent 1 to 3. If such orders are made available to the respondent 1 to 3 deduction if any, shall be made only in accordance with the orders passed by the appropriate authority under Income Tax Act.
5. In the said facts and circumstances complainant having not availed remedy available under the Income Tax Act and / or in the light of the above said judgement of the High Court, the complaint filed by the complainant has no merit and substance. It is absolutely false and untenable on the part of the complainant to contend that Chief Manager, Office Administration Department of the Bank should not have deducted Income Tax at all and passed on the same to Income Tax Department. The allegations of the complainant that such Act of OP is complete violation of IT guidelines has no merit and are liable to be rejected. The claim of the complainant that she submitted form No.16 to the Bank in respect of ex gratia payment is wholly untenable. The contention of the complainant that Bank should not have deducted the tax is false. The Exit Policy scheme clearly provided for the deduction of tax at source. Complainant accepted the terms and conditions of such Exit Policy and took retirement there under. Hence it is not correct on the part of the complainant to make such allegations regarding the refund of the deducted amount. It is for the complainant to take up the matter with the Income Tax Department and this OP has nothing to do in the matter particularly if complainant has filed Income Tax returns seeking refund. Further this OP is not concerned with what the complainant has done with the Income Tax Department. From the complaint averments it is clear that the complainant had not filed proper Income Tax returns and she was advised to file revised return which the complainant seems to have done in December 2009. It is false on the part of the complainant that she without any income facing hardship to run day to day life. Complainant has received good monitory benefits of retirement from the Bank. Complainant filed this complaint to harass the Bank and its officials. The complainant is not entitled to any reliefs against this OP, being refund of Income Tax amount of Rs.2,30,000/- interest amount of Rs.55,200/- till date of settlement and for harassment charges. Among other grounds OP prayed for dismissal of the complaint.
6. In order to substantiate the complaint averments, complainant filed her affidavit evidence and produced copy of the correspondences Income Tax return verification form, notice u/s. 142 (1) Income Tax Act 1961, Tax deduction at source on payment have ex gratia option scheme, copy of the letter dated 03.06.2008, 15.04.2010, copy of the letter dated 20.10.2010 issued by J.T.O., copy of the reply dated 26.10.2010, copy of form No.16. On behalf of OP-2 Sri.R. Balakrishna, Chief Manager in the Office administration department of OP-2 filed his affidavit evidence and produced copy of the staff circular No.011/2006-07. Order of the Hon’ble High Court in writ appeal No.1264 of 2007 (S-R), copy of the order of the writ petition No. 18073 of 2006. OP-2 submitted its written arguments. Heard from complainant side. Taken as heard from OP side.
7. From the above pleadings, the points now that arise for our consideration in this complaint are as under:
Point No. 1 :- Whether the complainant has Proved
the deficiency in service on the part of
the OP?
Point No. 2 :- If so, whether the complainant is
entitled for the relief’s now claimed?
Point No. 3 :- To what Order?
8. We have gone through the pleadings of the parties, both affidavit and documentary evidence and the arguments advanced. In view of the reasons given by us in the following paragraphs our findings on the above points are:
Point No.1:- In Negative
Point No.2:- Negative in part
Point No.3:- As per final Order.
R E A S O N S
9. At the outset it is not in dispute that on 30.04.2007 complainant took voluntary retirement from the services of OP-2 under ‘Exit Policy’ of the Bank. At that time of retirement complainant was given an ex gratia amount of Rs.9,94,376/- by OP-2. Since complainant has submitted form 16 it is alleged by the complainant that she is entitled for exemption from paying Income Tax u/s. 10AA of Income Tax Act of 1961. We have perused the copy of the Form 16 along with income tax return produced by the complainant. On 26.11.2007 complainant also submitted form 10E under rule 21AA. It is the grievance of the complainant that OP-2 ought not to have deducted the Income Tax of Rs.2,30,000/- as per annexure-3. OP-2 has deducted the TDS and kept in fixed deposit upto 07.04.2008 and remitted the same to Income Tax authorities on 07.04.2008. Inspite of repeated correspondence and requests OP-2 deducted the tax in violation of IT rules and guidance. Though complainant has filed Income tax returns and requested for refund; Since November 2008 her requests have gone on deaf ears. Though OP’s are under obligation to refund excess Income tax amount paid within 3 months on filing the Income Tax return; but failed to refund till date. Hence complainant has approached this forum.
10. As against the case of the complainant, the defence of the OP-2 bank is that complaint does not involve an element of quid-pro-quo between OP-2 and the complainant. There is no relationship of Consumer and Service provider. Hence no question of deficiency in service on the part of the OP-2. So complaint is not maintainable. In our view admittedly complainant was an employee of OP2; hence dispute between complainant and her employer OP-2 cannot be treated as consumer dispute.
11. Further coming to the merits of the complaint, it is contended that complainant submitted form 10E under rule 21AA of IT rules, as per the section 10AA of the IT Act, she is exempted from paying income tax on ex gratia amount of Rs.9,94,376/- paid by OP-2 at the time of her voluntary retirement. She was not liable to pay any tax to IT department, since form No.16 clearly indicates that no tax is payable.
We have perused the exit option scheme produced by OP-2. Clause 10 of the said scheme clearly provides that such exit option scheme does not comply with rule 10 (10-C) of IT Act; no benefit of exemption of ex gratia from income tax is indicated in the scheme. Further in that scheme vide annexure IV which deals with operating guidelines clearly stipulates that income tax has to be deducted at applicable rate. The said scheme also provides vide para-9 that income tax at source should be deducted. Under these circumstances we are of the view that under section 192 of income tax act, OP-2 is bound to deduct tax at source and remit the same to income tax department. On the basis of form No.10E the complainant can claim exemption from the income tax department under section 89(1) of the IT Act. Merely because complainant has submitted form 10E, it cannot be said that OP-2 was not required to deduct tax at source. Under these circumstances we are unable accept the contentions of the complainant that the Act of OP-2 deducting tax at source amounts to deficiency in service.
12. We have perused the order of the Hon’ble High Court of Karnataka in similar circumstances in Writ Appeal No.1264/2007 (S-R) in Sri. Bantwal Vamoa and anothers V/s. State Bank of India and others. It is observed that complainants should be allowed make applications u/s 89 and 197 of Income Tax Act before appropriate authority and appropriate authority shall take decision in accordance with law and pass appropriate orders and issue necessary certificate to the complainant. If complainant bring to the notice of the respondents that application has been filed before the appropriate authority then the respondents shall not deduct TDS amount payable to the complainant as ex gratia amount on account of their voluntary retirement from service until the orders passed by the appropriate authority under the Income Tax are made available to the respondents. If such orders are made available to the respondents deductions if any shall be made only in accordance with the orders passed by the appropriate authority under the Income Tax Act. Complainant has not availed the benefit of this judgement, as tax is already deducted at source.
13. Complainant in her further affidavit has sworn to the fact that OP-1 has retuned Rs.2,30,000/- on 20.09.2010 after filing of this complaint before this Forum. Hence complaint against OP-1 has become infructous. There is no relationship of consumer and service provider between complainant and OP-2. In view of the same complaint is not maintainable against OP-2. There is no merit in the complaint. Accordingly we proceed to pass the following:
ORDER
The complaint is dismissed. Considering the nature of dispute there is no order as to costs.
(Dictated to the Stenographer and typed in the computer and transcribed by him verified and corrected, and then pronounced in the Open Court by us on this the 11th day of March 2011.)
PRESIDENT
MEMBER MEMBER
gm.
