Rajendra Prakash Singh vs State of U.P. and Others

B.K. Narayana, J.—The instant writ petition has been filed by the petitioner for issuing a writ of Mandamus commanding the opposite parties No. 2 and 3 to refund the amount of Rs. 33,469/- to the petitioner allegedly withheld by them under the pretext of income tax deduction together with interest at the rate of 24% per annum and to deposit Rs. 74,500/- with the opposite party No. 4 immediately towards their Provident Fund Contribution and directing the opposite party No. 4 to recover the entire Provident Fund amount outstanding in petitioner''s P.F. No. UP/6791/10 together with 10% compound interest thereon w.e.f. the year 1998-1999 till date of its actual payment from the opposite parties No. 2 and 3 and for quashing the letters dated 22.06.2005 and 31.10.2005 (Annexure Nos. 3 and 5 respectively to the writ petition). The petitioner has also sought compensation for hardship and suffering caused to him as a result of conduct of the opposite parties No. 1 to 3.

Brief facts of the case emerging out from the pleadings of the parties are that the Board of Governors of the Institute of Tool Room Training, U.P., Lucknow hereinafter referred to as "ITTUP", which is a Society registered under the Societies Registration Act, 1860 and established in the year 1979 resolved in its meeting held on 20.05.1980 for staring Contributory Provident Fund Schemes and Formation of Trust for Contributory Provident Fund Scheme. The Trust Deed of ITTUP Provident Fund Trust was executed on 28.04.1986 and an amount of Rs. 11,69,994/- was transferred by the ITTUP to the said trust on 31.03.1986 towards its contribution as well as that of the members of the Trust. All the employees of ITTUP including the petitioner gave their consent to form the Trust. It is noteworthy that although on the date of the establishment of the ITTUP Provident Fund Trust, the ITTUP was already covered by the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, hereinafter referred to as "the Act", but the said information was not communicated to the ITTUP till the date of formation of the Trust. The fact that the provisions of the Act had been made applicable to the ITTUP came to its knowledge for the first time in the year 1985 when a letter in this regard dated 26.02.1985 issued by the Regional Provident Fund Commissioner was received by the ITTUP. The ITTUP vide letter dated 08.05.1985 requested the Regional Provident Fund Commissioner and the Income Tax Officer for exemption from the operation of the Act. By letter dated 19.07.1985, ITTUP requested the State Government for exemption of the Provident Fund Trust u/s 17(1) of the Act. The Income Tax Authorities granted exemption to the Provident Fund Trust from the provisions of the Income Tax Act. In the meantime, since no decision was taken by the concerned authorities on the application of ITTUP for being exempted from the operation of the provisions of the Act, several reminders were sent by the ITTUP to the concerned authorities but without any response. The exemption application of the ITTUP is still pending.

The petitioner was appointed on the post of Instructor (Workshop Practice) in the ITTUP by an order dated 09.03.1981. The petitioner borrowed a non-refundable loan of Rs. 74,500/- against his Provident Fund Account maintained by the ITTUP Provident Fund Trust. The petitioner was dismissed from service by an order dated 23/24.11.1998. The petitioner challenged the order terminating his services before this Court in Writ Petition No. 1226 (S/S) of 1999, which was dismissed by this Court vide order dated 04.07.2007. The petitioner thereafter filed another writ petition before this Court being Writ Petition No. 4856 (S/S) of 2000 seeking a writ of mandamus commanding the respondents in the said writ petition to pay the entire provident fund amount of the petitioner and to furnish him with updated passbook and the annual statements of his Provident Fund account. This Court vide order interim dated 04.09.2000 passed in the aforesaid writ petition required the petitioner to apply to the Provident Fund Commissioner for release of his provident fund and to fill up the necessary forms and Provident Fund Commissioner was also directed to complete all the formalities and to ensure the payment of provident fund amount to the petitioner.

Another order was passed by this Court in the aforesaid writ petition on 11.10.2000 by which the respondents were directed to ensure the payment of provident fund to the petitioner. It appears that interim orders of the writ court were not complied with as a result the petitioner filed Criminal Misc. Case No. 449 (C) 2001 alleging disobedience of the interim orders passed in the Writ Petition No. 4856 (S/S) of 2000. Upon being noticed with the institution of the contempt proceedings, the opposite parties No. 2, 3 and 4 paid an amount of Rs. 4,13,279/- to the petitioner through cheque. However, since the petitioner disputed the quantum of amount, which the respondents were liable to pay to him towards his provident fund dues, this Court passed an order in the contempt case on 11.07.2005 permitting the petitioner to move appropriate application in the writ jurisdiction. The Court further provided that the petitioner may move an application supported by relevant material and pleading for payment of pension from October, 2000 as well as raising his grievance relating to the quantum of provident fund before the Regional Provident Fund Commissioner, who shall decide the same by passing a speaking and reasoned order within a period of three months from the date of receipt of said representation and shall communicate his decision to the petitioner within the said period. Pursuant to the order of this Court dated 11.07.2005, the petitioner preferred a detailed representation before the opposite party No. 4 on 08.08.2005, which was decided by him by order dated 03.10.2005, copy whereof has been filed as Annexure No. 2 to the writ petition. By the said order it was provided that M/s ITTUP was liable to pay an amount of Rs. 74,500/- to the petitioner towards the outstanding contribution of the employer. Prior to the passing of the order dated 03.10.2005, another order was passed by the Enforcement Officer, R.P.F.C, Lucknow on 28.09.2005 holding that M/s ITTUP was not legally entitled to adjust the alleged non-refundable loan advanced by it to the petitioner towards employer''s statutory contribution.

M/s ITTUP preferred an appeal u/s 7-I of the Act against the orders dated 03.10.2005 and 28.09.2005 passed by the opposite party No. 4 and the Enforcement Officer before the Employees Provident Fund Appellate Tribunal, New Delhi which was numbered as Appeal No. 965 of 2005 and which is still pending. After passing of the order dated 03.10.2005 by the opposite party No. 4, an order was passed in Criminal Misc. Contempt Case No. 449 (C) of 2001 discharging the contempt proceedings against the Regional Provident Fund Commissioner and the Enforcement Officer after being satisfied that the order of the writ court has been complied with. An amount of Rs. 74,500/-, which the M/s ITTUP was held liable to pay to the petitioner as per the order of the Provident Fund Commissioner, was recovered from M/s ITTUP by attaching the ITTUP''s Bank Account in the Orient Bank of Commerce and was paid to the petitioner.

According to the opposite parties No. 2 and 3, the amount of Rs. 33,469/- was deducted at source from the salary of the petitioner, which the petitioner was liable to pay towards the income tax and the said amount is not being withheld by them and the same has been deposited with the Income Tax Authorities vide Challan dated 31.03.2004.

I have heard petitioner-Rajendra Prakash Singh in person and Sri Sudeep Seth, learned Counsel appearing for the opposite parties No. 2 and 3. No one has put in appearance on behalf of the opposite party No. 4.

Learned Counsel for the petitioner has submitted that deduction of Rs. 33,469/- from the petitioner''s salary made by M/s ITTUP towards payment of income tax without disclosing the period to which the said dues relate has rendered the action of the opposite parties No. 2 and 3 absolutely illegal and arbitrary. In support of his submission, the petitioner has referred to the following Sections of the Income Tax Act:

Section 192(1)- "Any person responsible for paying any income chargeable under the head ''Salaries'' shall at the time of payment, deduct Income Tax on the amount payable at the average rate of Income Tax computed on the basis of the rate in force for the financial year in which the payment is made, on the estimated income of the assessee under this head for that financial year.

Section 201(1))-"If any such person, referred to in Section 200 and in the case referred to in Section 194 the principal officer and the company of which he is the principal officer does not deduct (the whole or any part of the tax) or after deducting fails to pay the tax as required by or under this Act, he or it shall without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax.

Section 203AA- "The prescribed Income Tax authority or the person authorized for such authority referred to in Sub-section (3) of Section 200 shall within the prescribed time after the end of each financial year beginning on or after the 1st day of April prepare and deliver to every person from whose income the tax has been deducted or in respect of whose income the tax has been paid a statement in the prescribed form specifying the amount of tax deducted or paid and such other particulars as may be prescribed.

Section 239(2)(c)- "Where the claim is in respect of income which is assessable for any other assessment year, one year from the last day of such assessment year.

Relying upon the above mentioned Sections, the petitioner submitted that in case the opposite parties No. 2 and 3 had failed to deduct the income tax, if any, which the petitioner was liable to pay from the petitioner''s salary within the prescribed period of time as and when the same was liable to be deducted, they were not legally entitled to deduct the income tax which the petitioner was allegedly liable to pay during several preceding years from the petitioner''s salary for one year as lump sum. Hence, the petitioner was entitled to the refund of the entire amount deducted from the petitioner''s salary towards income tax together with interest at the rate of 24%.

The petitioner further submitted that the income tax statement showing the details of petitioner''s income and the income tax, which he was liable to pay, filed by the opposite parties alongwith their supplementary counter affidavit is vague and full of discrepancies.

Learned Counsel for the opposite parties No. 2 and 3 replying to the aforesaid submission of the petitioner submitted that the income tax deduction of Rs. 33,469/- was not withheld by the ITTUP and the same has been deposited with the Income Tax Authorities, who have issued challan receipt, which is on record of the writ petition. He further submitted that the ITTUP being his employer u/s 192 of the Income Tax Act, 1961 had legally deducted income tax from the petitioner''s salary and deposited the same in Tax Deduction Calculation Account Number. The Tax Deduction Calculation Account Number is allotted in the name of the employer and u/s 192 of the Income Tax Act, 1961 it is the responsibility of the employer to deduct the income tax at source and deposit the same with the Income Tax Department and the petitioner is unnecessarily dragging the issue relating to income tax deduction at source in the instant writ petition. In case, the petitioner is aggrieved by the income tax deductions made by his employer, the appropriate remedy lies under the provisions of the Income Tax Act, 1961 before the Income Tax Authorities and no relief for refund of the income tax deducted at source can be granted to the petitioner in the instant proceedings as the petitioner has not even impleaded the Income Tax Authorities as opposite parties in the present writ petition. Learned Counsel for the ITTUP next submitted that the entire salary statement of the petitioner giving details of the deduction of the income tax of Rs. 33,469/- from the petitioner''s salary which was due from the petitioner has been furnished along with the supplementary counter affidavit filed by the opposite parties No. 2 and 3 before this Court on 27.03.2007. The said salary statement of the petitioner relates to the period July, 1997 to 23.11.1998 and contains the calculation of the income tax deduction. The said statement clearly shows that ITTUP deducted an amount of Rs. 33,469/- from the petitioner''s salary at source towards the income tax, which the petitioner was liable to pay on his income for the period 23.03.2007 and 23.11.1998. Hence, it cannot be said that there is any ambiguity in the aforesaid statement. The copy of the challan receipt shows that the ITTUP has deposited the aforesaid amount with the Income Tax Authorities and the same was not being withheld by the ITTUP.

The petitioner has failed to point out any discrepancy in the calculation of the income tax deduction and he has further failed to show that the said amount has not been deposited by the opposite parties with the Income Tax Authorities. The submission made by the petitioner that the income tax deduction at source from the petitioner''s salary has been made by the opposite parties No. 2 and 3 in an arbitrary manner, therefore, has no force and is liable to be rejected. The petitioner has miserably failed to show violation of any of the provisions of the Income Tax Act relied upon by him, by the ITTUP.

In case, the petitioner feels that the income tax deducted by his employer at the source is in excess of the amount which the petitioner is liable to pay as income tax for the period concerned, he may seek necessary refund before the Income Tax Authorities.

As far as the second relief sought by the petitioner in the present writ petition is concerned, I am afraid that the petitioner has failed to point out any error or illegality in the orders/letters dated 22.06.2005 and 31.10.2005 so as to call for interference by this Court with the said orders/letters.

As far as issuing of a writ, order or direction in the nature of mandamus commanding the opposite parties No. 2 and 3 to deposit Rs. 74,500/- with the opposite party No. 4 as Provident Fund Contribution of the petitioner is concerned, the said relief was amended by the petitioner on 28.03.2007 and a writ in the nature of mandamus was sought commanding the opposite party No. 4 to recover from the the opposite parties No. 2 and 3 the entire Provident Fund amount outstanding in his Provident Fund Account together with 10% compound interest thereon w.e.f. the year 1998-1999 till date of its actual payment.

The petitioner has submitted that he was entitled to receive his provident fund amount of Rs. 74,500/- in the year 1999 whereas the actual payment of the said amount was made in the year 2005 and the opposite parties No. 2 and 3 have failed to give any satisfactory explanation for delayed payment of his provident fund amount which was paid to the petitioner by attachment of the Bank Account of the opposite parties No. 2 and 3.

Learned Counsel for the opposite parties No. 2 and 3 repelling the submissions made by the petitioner contended that since the petitioner''s appeal against the order of the Regional Provident Fund Commissioner by which the opposite parties No. 2 and 3 were held liable to pay an amount of Rs. 74,500/- as their contribution to the petitioner''s Contribution Fund is still pending and has not been decided, it cannot be said that there is any deliberate delay on the part of the answering opposite parties in the payment of provident fund amount of the petitioner. Sri Seth further submitted that the question whether opposite parties No. 2 and 3 are entitled to adjust the amount of Rs. 74,500/-which had been advanced to the petitioner as non-refundable loan and which admittedly to this date has not been repaid by the petitioner towards their statutory share to the petitioner''s provident fund is still subjudice before the Appellate Authority and hence, the answering opposite parties are not liable to pay any interest on the alleged delayed payment of the petitioner''s provident fund.

The submission made by Sri Seth has some force and hence till the appeal preferred by the opposite parties No. 2 and 3 against the orders dated 28.09.2005 and 03.10.2005 holding that the opposite parties No. 2 and 3 were not liable to adjust the amount advanced by them to the petitioner as non-refundable loan towards their statutory share to the petitioner''s provident fund and hence, the petitioner was liable to be paid Rs. 74,500/- as their contribution is not decided, the opposite parties No. 2 and 3 cannot be saddled with any interest liability. However, I hold that in case the appeal preferred by the opposite parties No. 2 and 3 against the orders dated 28.09.2005 and 03.10.2005 is dismissed by the Appellate Authority, the petitioner will be at liberty to agitate his claim for interest on the delayed payment of the provident fund amount. However, at this stage in my opinion, the petitioner is not entitled to any interest on the delayed payment of his provident fund.

The relief for grant of compensation has not been pressed by the petitioner.

For the aforesaid reasons, there is no merit in the writ petition and the same is accordingly dismissed.

However, the dismissal of this writ petition, as observed hereinabove, shall not debar the petitioner from agitating his claim for grant of interest on the delayed payment of provident fund amount, in case the Appeal No. 965 of 2005 preferred by the opposite parties No. 2 and 3 against the orders of the Enforcement Officer and the opposite party No. 4 dated 28.09.2005 and 03.10.2005 respectively is dismissed by the Appellate Authority. It will also be open to the petitioner to apply before the Income Tax Authorities for refund of excess amount of income tax, if any, deducted by his employer from his salary at source.