No Income Tax on “Compensation” For Medical Negligence: SC Rebukes AMRI Hospital For Deducting TDS in Anuradha Saha Death Case

Supreme Court special bench of Justices Mr. C.K. Prasad and Mr. V. Gopala Gowda severely criticized AMRI hospital for deducting Rs. 1.06 crore for income tax as “tax deducted at source” (TDS) from the “compensation” imposed on the hospital for the wrongful death of Anuradha Saha, wife of PBT president Dr. Kunal Saha (news below).  On October 24, 2013, Apex Court delivered historic judgment in Anuradha case awarding highest-ever compensation of Rs. 11.5 crore including interest against AMRI hospital and three top Kolkata doctors including present “chief adviser” for West Bengal health department, Dr. Sukumar Mukherjee.  AMRI had earlier sought extra time to pay the compensation which was rejected by the Apex Court.  After AMRI failed to pay the entire compensation on time, Dr. Saha filed a “contempt” petition against AMRI hospital.  When the matter was taken up by the court this week, it was found that AMRI had withheld more than Rs. 1.06 crore from the compensation on the plea of TDS.  The Apex Court took serious view this action by AMRI hospital because “compensation” for wrongful death of a patient should not be considered as “income” for the victim’s family.  At the direction of the court, AMRI was compelled to pay a check in the amount of Rs. 1.06 crore to Dr. Saha who was present in the courtroom.  The Apex Court also directed that all other discrepancies in the amount paid by AMRI hospital must be sorted out within two weeks.  The “contempt” has been listed for final hearing on 30th July, 2014.

Statesman (july 8, 2014) p. 1

Statesman (July 8,2014) p. 2

Telegraph (July 8, 2014)