M/S HINDUSTAN COCA COLA BEVERAGE PVT. LTD. versus COMMISSIONER OF INCOME TAX

Citation: [2007] 8 S.C.R. 1046 · Decided: 16-08-2007 · Supreme Court of India · Bench: S.H. KAPADIA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
"' l -MIS. HINDUSTAN COCA COLA BEVERAGE PVT. LTD. 
v. 
- COMMISSIONER OF INCOME TAX 
-... , AUGl;ST 16, 2007 
.. 
·, ,,,. 
(S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.] 
Judicial Interft;ren<;:e-Order by tribun_al directing reopening. of matter 
for further hearing-Order of tribunal having attained finality-Interference 
C }Y Jiigh Court-Propriety of-Held: Not proper-Judgment/Order. 
Income Tax Act, I96I-Sections I94C and 20I(l)-Assessee paying 
warehouse charges to a company on which it deducted tax under section 
I 94-C-Assessing Officer holding 'assessee in default' for amount of short 
deduction of tax and levied interest thereon-Circular that no demand 
D visualized under s. 20I (I) to be enforced after tax deductor satisfied the 
officer-in-charge of TDS, that taxes due were paid by deductee-assessee-
However, interest could be levied under s. 20I till the date of payment of 
..__ 
E 
taxes by deductee-assessee-On facts, both interest uls 211 and tax due 
paid-Circular applicable to the facts of the case-CBDT Circular No. 2751 
20I/95-IT (B} dated 29.1.1997. 
Appellant-assessee used the premises of POC for store purpose and paid 
POC the warehouse charges on which tax was deducted under section 194C 
of the Income Tax Act, 1961 @2%. Assessing Officer held the appellant to 
be 'assessee in default' for the shortfall in the amount of tax deducted at 
F source in respect of warehouse charges paid to POC and levied interest under 
section 201 (IA) of the Act on the amount of tax alleged to be short deducted. 
Appellant filed appeal. Tribunal upheld the order of the Assessing Officer. 
High Court also upheld the order. Thereafter, appellant filed miscellaneous 
application in the appeals that were already disposed of. Appellant sought 
rectification of the order of tribunal on the ground that its alternative 
G contention raised in Ground No. 7 in the memorandum of appeal that the 
warehouser has been assessed on its income and the tax due has been recovered 
from it by the department and as such, no further tax could be collected from 
the appellant on the same income, was not considered by the Tribunal. The 
Tribunal allowed the application by recalling its earlier order. The Department 
H 
1046 
'I-
HINDUSTAN COCA COLA BEVERAGE PVT. L TO .•. COMMNR. OF INCOME TAX 
I 04 7 
did not challenge the said order. Tribunal upon rehearing the appeal held that A 
though the appellant-assessee was rightly held to be an 'assessee in default', 
there could be no recovery of the tax alleged to be in default once again from 
the appellant considering that POC had already paid taxes on the amount 
received from the appellant However, High Court held that the tribunal could 
not have reopened the matter for any further hearing since the earlier order 
of the Tribunal attained finality on dismissal of appeal filed against the earlier B 
order, by High Court; that the point based on Ground No. 7 was not taken up 
in the appeal filed by the appellant; and that the Tribunal's earlier order got 
itself merged into the order passed by High Court. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. The order passed by the Tribunal to reopen the matter for 
further hearing as regards ground No. 7 has attained its finality. In the 
circumstances, the High Court could not have interfered with the final order 
passed by the Income-tax Appellate Tribunal. (Para 9) (1050-B) 
1.2. The circular No. 275/201/95-IT(B) dated 29.1.1997 issued by the 
Central Board of Direct Taxes declares "no demand visualized under s. 201 
(1) of the Income-tax Act should be enforced after the tax deductor has satisfied 
c 
D 
the officer-in-charge ofTDS, that taxes due have been paid by the deductee-
assessee. However, this will not alter the liability to charge interest under 
Section 201(1A) of the Act till the date of payment of taxes by the deductee- E 
assessee or the liability for penalty under Section 271C of the Income-tax 
Act." (Para 10) (1050-C, DI 
1.3. In the instant case, the appellant had paid the interest under Section 
201(1A) of the Act and there is no dispute that the tax due had been paid by 
deductee-assessee, POC. It is not disputed that the circular is applicable to F 
the facts situation on hand. (Para 11) (1050-E) 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3765 of2007. 
From the Judgment and Order dated 11. I 0.2006 of the High Court of 
Delhi at New Delhi in LT.A. Nos. 478 and 843of2005. 
G 
Soli J. Sorabjee, Bharga

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