Facts of the Case

  • The Revenue filed an appeal (ITA No. 1104/2005) before the High Court of Delhi against the order of the Income Tax Appellate Tribunal (ITAT) for the assessment year 1979-80.
  • The ITAT had dismissed the Revenue's appeal for the assessment year 1979-80 by heavily relying upon its own previous orders passed in the assessee’s own case for multiple assessment years, specifically AY 1977-78, 1978-79, 1980-81, 1981-82, 1982-83, and 1983-84.
  • Aggrieved by those historical orders of the Tribunal, the Revenue had previously preferred a massive batch of Income Tax Appeals (including ITA Nos. 129/03, 565/04, 235/05, 237/02, 250/02, 311/02, 103/03, 105/03, 106/03, 107/03, 123/03, 127/03, 409/03, 499/03, 458/04, 485/04, 722/02, and 758/04) before the Delhi High Court.
  • All those previous appeals involving identical questions of law had already been dismissed by a common order passed by a Division Bench of the Delhi High Court (comprising Hon'ble Mr. Justice Swatanter Kumar and Hon'ble Mr. Justice Madan B. Lokur).

Issues Involved

  • Whether the present appeal preferred by the Revenue for AY 1979-80 could be sustained when the exact same substantial question of law had already been adjudicated and dismissed by a coordinate Division Bench of the same High Court in a batch of historical connected matters for the same assessee?
  • Whether the disposal of the current appeal should be deferred or postponed merely because the Revenue has assailed the High Court's previous common order before the Supreme Court of India via Special Leave Petitions (SLPs) whose outcomes are pending verification?

Petitioner’s (Revenue's) Arguments

  • The learned counsel for the Revenue, Mr. R.D. Jolly, argued that the primary common order passed by the Delhi High Court in the connected matter ITA No. 129/2003 and others (which formed the basis of the ITAT’s view) had not attained finality.
  • It was submitted that the Revenue had actively assailed and challenged the said prior order by filing statutory appeals before the Supreme Court of India.
  • The Petitioner requested the High Court to grant additional time to verify whether the Special Leave Petitions (SLPs) filed against the previous batch of cases had been disposed of by the Supreme Court, and to ascertain the final result before passing orders on the present appeal.

Respondent’s Arguments

  • No one appeared on behalf of the Respondent (M/s Usha Stud & Agricultural Farms) at the time of the hearing. However, the lower record indicated that the ITAT had decided the matter in favor of the Respondent based on established consistency and matching historical precedents across various assessment years.

Court Order / Findings

  • The Division Bench, comprising Hon'ble Mr. Justice T.S. Thakur and Hon'ble Mr. Justice B.N. Chaturvedi, observed that the exact same question raised for consideration in the present appeal had already failed in a long line of previous appeals filed by the Revenue.
  • Applying the strict judicial principle of parity of reasoning, the Court held that since the identical question of law was already dismissed in the earlier batch of cases, the present appeal must also fail.
  • The High Court explicitly rejected the Revenue's prayer to postpone the disposal of the appeal. The Court ruled that there was absolutely no need to defer proceedings because the previous order passed by the High Court's Division Bench settled the question of law as far as the High Court was concerned.
  • The Court clarified that if the previous order of the High Court was under challenge before the apex court, the Revenue would remain completely free to prefer an appeal to the Supreme Court against this present decision as well. Consequently, the appeal was dismissed.

Important Clarification

  • Doctrine of Judicial Consistency: The judgment clarifies that a pending Special Leave Petition (SLP) or appeal before the Supreme Court against a High Court's own binding precedent does not act as an automatic stay or bar on the High Court from disposing of current matters utilizing the same rationale. The position settled by a coordinate bench remains authoritative and binding on the High Court until it is overturned or modified by the Supreme Court.

Section Involved

  • Section 260A of the Income Tax Act, 1961 (Appeals to High Court).

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2005:DHC:15098-DB/61321112005ITA11042005_141738.pdf

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