Facts of the Case

The Commissioner of Income Tax filed Income Tax Appeals No. 819 of 2010 and 870 of 2010 before the Delhi High Court against M/s Bhag Chand Ajay Kumar. During the hearing, counsel appearing for the Revenue fairly stated that the controversy raised in the present appeals was already covered by the judgment of the Supreme Court in Assistant Commissioner of Income Tax & Anr. v. Hotel Blue Moon, (2010) 3 SCC 259. Consequently, the Court considered the effect of the binding precedent on the appeals.

 

Issues Involved

  1. Whether the issues raised by the Revenue were already settled by the Supreme Court in Hotel Blue Moon.
  2. Whether any substantial question of law survived for consideration by the Delhi High Court after the Supreme Court's authoritative pronouncement.
  3. Whether the Revenue's appeals were liable to be dismissed in light of the binding precedent.

 

Petitioner’s (Revenue’s) Arguments

  • The appeals were filed by the Commissioner of Income Tax challenging the decision in favour of the assessee.
  • However, during the course of hearing, learned counsel for the Revenue candidly acknowledged that the controversy involved in the appeals was covered by the Supreme Court judgment in Assistant Commissioner of Income Tax & Anr. v. Hotel Blue Moon.

 

Respondent’s Arguments

  • No appearance was recorded on behalf of the respondent-assessee in the order.
  • Since the controversy stood covered by a binding Supreme Court judgment, the Court proceeded to decide the matter accordingly.

 

Court Findings

The Delhi High Court noted the statement made by the Revenue's counsel that the controversy involved in the present appeals was already covered by the decision of the Supreme Court in Assistant Commissioner of Income Tax & Anr. v. Hotel Blue Moon, (2010) 3 SCC 259. Accepting the position that the issue was no longer res integra and stood settled by the Apex Court, the High Court found no reason to entertain the appeals further.

 

Court Order

The Delhi High Court held that, in view of the Supreme Court judgment in Hotel Blue Moon, the present appeals were liable to be dismissed.

Accordingly, ITA No. 819/2010 and ITA No. 870/2010 were dismissed in limine.

 

Important Clarification

The Delhi High Court did not independently examine the merits of the controversy. The appeals were dismissed because the legal issue involved had already been conclusively settled by the Supreme Court in Assistant Commissioner of Income Tax & Anr. v. Hotel Blue Moon, (2010) 3 SCC 259. The judgment reinforces the principle that lower courts are bound by the law declared by the Supreme Court under Article 141 of the Constitution of India.

Relevant Sections Involved

  • Section 158BC of the Income-tax Act, 1961 (as interpreted in the precedent relied upon)
  • Section 143(2) of the Income-tax Act, 1961
  • Principles laid down by the Supreme Court in Assistant Commissioner of Income Tax & Anr. v. Hotel Blue Moon, (2010) 3 SCC 259

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2010:DHC:12043/MMH16072010ITA8702010_113053.pdf

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