Facts of the Case

The Revenue filed an appeal before the Delhi High Court challenging the order dated 23 July 2003 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 2446/Delhi/1999 pertaining to Assessment Year 1995-96. The dispute related to an issue that, according to the Revenue itself, was already covered by an earlier judgment of the Delhi High Court in Commissioner of Income-tax v. Bansal Credits Ltd. (2003) 259 ITR 69. The Revenue further acknowledged that the Special Leave Petition (SLP) filed against the decision in Bansal Credits Ltd. had already been dismissed by the Supreme Court.

 

Issues Involved

  1. Whether the Revenue's appeal raised any substantial question of law warranting interference with the order of the Income Tax Appellate Tribunal.
  2. Whether the issue involved stood concluded by the Delhi High Court's earlier decision in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69.
  3. Whether, in view of the dismissal of the SLP by the Supreme Court, the Revenue could seek a different interpretation of the same legal issue.

 

Petitioner’s Arguments (Revenue)

  • The Commissioner of Income Tax challenged the order passed by the Income Tax Appellate Tribunal.
  • However, during the hearing, counsel appearing for the Revenue fairly conceded that the question arising in the appeal was squarely covered by the judgment of the Delhi High Court in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69.
  • It was also conceded that the Special Leave Petition filed by the Department against the said judgment had already been dismissed by the Supreme Court.

 

Respondent’s Arguments

  • The respondent relied upon the binding precedent laid down in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69.
  • Since the controversy had already been settled by the High Court and the Supreme Court had declined to interfere, the respondent contended that no further question survived for consideration.

 

Court Order / Findings

The Delhi High Court observed that the controversy raised in the appeal was fully covered by its earlier decision in Commissioner of Income-tax v. Bansal Credits Ltd. (2003) 259 ITR 69. The Court further noted the Revenue's admission that the Special Leave Petition filed against the said judgment had already been dismissed by the Supreme Court.

Accordingly, the Court held that no merit existed in the appeal and dismissed the same by following the law laid down in Bansal Credits Ltd..

 

Important Clarification

  • Once an issue has been conclusively settled by a jurisdictional High Court and the Supreme Court has declined to interfere with that view, subsequent appeals involving the same question are liable to be dismissed by applying the binding precedent.
  • The judgment reinforces the principle of judicial consistency and certainty in tax litigation.
  • The decision primarily follows and applies the ratio laid down in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69 without undertaking any independent re-examination of the legal issue.

 

Sections Involved

  • Section 68 of the Income-tax Act, 1961 – Unexplained Cash Credits / Share Capital (as governed by the precedent in CIT v. Bansal Credits Ltd.)
  • Section 260A of the Income-tax Act, 1961 – Appeal to the High Court

Link to Download the Order

https://delhihighcourt.nic.in/app/case_number_pdf/2005:DHC:9786-DB/SK17012005ITA162005_165518.pdf

 

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