Vimal Kanwar & Ors. Vs. Kishore Dan & Ors., Civil Appeal No. 5513 of 2012 (arising out of SLP(C) No.6367 of 2012)
(Decided on May 3, 2013)
The Hon'ble Supreme Court held that:
"...It is clear that if the annual income comes within the taxable range, income tax is required to be deducted for determination of the actual salary. But while deducting income tax from salary, it is necessary to notice the nature of the income of the victim. If the victim is receiving income chargeable under the head "salaries" one should keep in mind that under Section 192 (1) of
the Income tax Act, 1961 any person responsible for paying any income chargeable under the head "salaries' shall at the time of the payment, deduct income tax on estimated income of the employee from "salaries" for that financial year. Such deduction is commonly known as tax deducted at source (‘TDS’ for short). When the employer fails in default to deduct the TDS from employee salary, as it is his duty to deduct the TDS, then the penalty for non deduction of TDS is prescribed under Section 201(1A) of the Income tax Act, 1961. Therefore in case of the income of the victim is only from "salary" the presumption would be that the employer under Section 192 (1) of the Income tax Act, 1961 has deducted the tax at source from the employee's salary. In case if any objection is raised by any party, the objector is required to prove by producing the evidence such as LPC to suggest that the employer failed to deduct the TDS from the salary of the employee. However, there can be cases where the victim is not a salaried person i.e. his income is from sources other than salary, and the annual income falls within taxable range, in such cases, if any objection as to deduction of tax is made by a party then the claimant is required to prove that the victim has already paid income tax and no further tax has to be deducted from the income" [Para 21]
The Court on the facts of the
case held:
"In view of the findings as recorded above and the
provisions of the Income tax Act, 1961, as discussed, we hold that the High
Court was wrong in deducting 20% from the salary of the deceased towards the
income tax, for calculating the compensation. As per the law, the presumption
will be that employer – State Government at the time of the payment of salary
deducted income tax on the estimated income of the deceased employee from the
salary" [Para 23]
The court also noted the following case law:
Sarla Verma & Ors. v. Delhi Transport Corporation & Anr. (2009) 6 SCC 121,
where the Court held that
“generally the actual income of the deceased less income tax should be the starting point for calculating the compensation.”
This Court further observed that “where the annual
income is in taxable range the word “actual salary”
should be read as “actual salary less tax”.
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