Date of Filing:22.12.2008

Date of Order : 19.03.2009

BEFORE THE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE - 20

Dated: 19th DAY OF MARCH 2009

PRESENT

Sri. Bajentri H.M, B.A, LL.B., President

Smt.C.V. Rajamma, B.Sc., LL.B., PGDPR, Member


COMPLAINT NO. 2770 OF 2008

N.Murugendrappa
No.64, K.V.Extension,
1st Main Road,
New Police Station Road,
K.R.Puram, B’lore-560 036.

…. Complainant.

V/s

The Executive Officer,
Herbalife International India Pvt. Ltd.,
Vaswani Wilshire, No.14,
Commissariat Road,
Bangalore – 560 026.

…. Opposite Party

-: ORDER:-

This complaint is for a direction to the Opposite Party to pay Rs.7,700/- towards the TDS deducted and to pay compensation of Rs.5,000/-.
2. The case of the complainant is as under:-
The complainant is a distributor of the Opposite Party Company with ID No.W132874 and is doing the business as independent distributor of Herbalife products. The Opposite Party pays commission for the orders placed on the products. Rs.1,397/- was deducted towards TDS from the commission payable to him as per the statement dated:15.12.2007. By the letter dated:30.12.2007 he informed the Opposite Party not to deduct income tax at source as he is retired person and his income is within the exempted limit. He did not get any reply or response to the said letter. He again wrote a letter dated:14.02.2008 requesting to stop deduction of tax and to refund the amount deducted earlier. In spite of it, the Opposite Party continued deducting income tax without giving any reply. Finally he sent communication to the Opposite Party stating that Rs.5,138/- plus $51.89 dollars has been deducted as TDS. In spite of requests, the Opposite Party has failed to follow the income tax norms and standard deductions and exemption limits and has not taken into consideration the documents forwarded indicating the exemption limit to the senior citizens. The total income tax deducted from December 2007 till the date works out Rs.5,138/- plus $51.98. Hence, the complaint.
3.In the version, the contention of the Opposite Party is as under:-
The complainant is not a Consumer and this Forum has no jurisdiction to entertain the complaint. There is no provision under the Income Tax Act to exempt or withhold tax on the income earned by way of commission. As the distributor of the Opposite Party Company, the complainant earned commission. As per Section 194-H of the Income Tax Act, the Opposite Party has to deduct the tax at source from the commission earned by the complainant and to remit the same to the Income Tax Authorities. As per Section 194H of the Income tax Act, if the income from commission earned during the financial year exceeds Rs.2,500/-, the tax has to be deducted at 10%. The complainant has an option to claim refund from the assessing authority by filing the income tax returns. U/s 194H of the Income Tax Act it is mandatory to deduct the income tax at source on the commission earned if it crosses specified limit and there is no exemption to retired or senior citizens. It was repeatedly explained to the complainant that the income by way of commission comes U/s 194H and they are bound to deduct tax at source. But the complainant is not trying to understand. Even the Chartered Accountant whose opinion was sought has given opinion that Form 15H is not applicable for the income earned from commission and section 194H is applicable. Thus, there is no deficiency in service on their part and as such the complainant is not entitled to any relief. On these grounds, the Opposite Party has prayed for dismissal of the complaint.
4. In support of their contentions, both parties have filed affidavits and have produced copies of documents. We have heard the arguments on both side.
5. The points for consideration:-
1.Whether the complainant has proved deficiency in service on the part of the Opposite Parties?
2.Whether the complainant entitled to the relief prayed for in the complaint?
6. Our finding to both points is in the NEGATIVE for the following:-

-:REASONS:-

7. Admittedly the complainant is working as Distributor under the Opposite Party Company and is earning commission on the orders placed for the products. The dispute is with regard to the deduction of TDS on the commission payable to the complainant. It is not the case of the complainant that in spite of deducting certain amount towards TDS, the Opposite Party has not paid that amount to the Income Tax Department. The grievance of the complainant is that he is a senior citizen and his income is within the tax exemption limit and therefore the Opposite Party was not entitled to deduct the income tax at source on the amount payable to him towards commission. But from Section 194H of the Income Tax extracted by the Opposite Party in the version it is seen that even on commission earned, tax at source is payable if the income exceeds Rs.2,500/-. The said section mandates the persons making payment to deduct the tax at source. If according to section 194H of the Income Tax Act, the Opposite Party deducted Income Tax at source and remitted the same to the account of the Income Tax Authorities, such act of the Opposite Party will not amount to deficiency in service. If the income of the complainant is within the exempted limit, he has to file the returns to the concerned authority and claim refund of the excess Income Tax paid. When the Opposite Party has already paid the amount to Income Tax Department, the complainant is not entitled to seek payment of the said amount from the Opposite Party. Thus, we find no deficiency in service on the part of the Opposite Party and therefore hold that the complainant is not entitled to the relief prayed for. In the result, we pass the following:-

-:ORDER:-

• The complaint is DISMISSED. There is no order as to costs.
• Send a copy of this order to both parties free of costs immediately.
• Pronounced in the Open Forum on this the 19th DAY OF MARCH 2009.

Sd/- Sd/-
MEMBER PRESIDENT