Facts of the Case

The Revenue, through the Commissioner of Income Tax, Delhi, filed an appeal before the Delhi High Court under Section 260A of the Income-tax Act, 1961 against M/s Sagar Suri Estate & Finance. The issue sought to be raised by the Revenue had already been considered and decided by the Delhi High Court in the earlier judgment of Commissioner of Income-tax v. Bansal Credits Ltd. (2003) 259 ITR 69. The Revenue nevertheless attempted to pursue the appeal by contending that notices had been issued by the Supreme Court in certain Special Leave Petitions involving a similar issue.

Issues Involved

  1. Whether the appeal filed under Section 260A of the Income-tax Act, 1961 involved any substantial question of law requiring consideration by the High Court.
  2. Whether issuance of notice by the Supreme Court in certain Special Leave Petitions on a similar issue justified entertaining the appeal.
  3. Whether the earlier decision of the Delhi High Court in CIT v. Bansal Credits Ltd. continued to bind the Court after dismissal of Special Leave Petitions challenging that judgment.

Petitioner’s Arguments (Revenue)

The Revenue contended that although the issue had been decided by the Delhi High Court in CIT v. Bansal Credits Ltd., the Supreme Court had issued notices in certain Special Leave Petitions involving a similar question. On that basis, the Revenue sought consideration of the appeal and requested that the matter be entertained despite the existing precedent.

Respondent’s Arguments (Assessee)

The assessee relied upon the binding decision of the Delhi High Court in CIT v. Bansal Credits Ltd. (2003) 259 ITR 69, which had already settled the issue. It was asserted that no substantial question of law survived for adjudication and that the appeal deserved dismissal in light of the finality attained by the earlier judgment.

Court Order / Findings

The Delhi High Court observed that the controversy raised by the Revenue already stood concluded by its earlier judgment in Commissioner of Income-tax v. Bansal Credits Ltd. (2003) 259 ITR 69. Consequently, no question of law, much less a substantial question of law, survived for consideration under Section 260A of the Income-tax Act.

The Court further noted that Special Leave Petitions filed both by the Revenue and by the assessee against the aforesaid judgment had been dismissed by the Supreme Court, resulting in the judgment attaining finality. Therefore, the Court declined to entertain the appeal and dismissed the same.

Important Clarification

  • Mere issuance of notice by the Supreme Court in other Special Leave Petitions involving a similar issue does not dilute or suspend the binding effect of an existing judgment that has already attained finality.
  • Once a legal issue stands concluded by a binding precedent and the challenge thereto has failed before the Supreme Court, no substantial question of law can be said to survive for the purposes of an appeal under Section 260A.
  • Section 260A jurisdiction can be invoked only when a genuine substantial question of law arises for consideration by the High Court.

Sections Involved

  • Section 260A, Income-tax Act, 1961 – Appeal to High Court involving substantial questions of law.

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2003:DHC:18834-DB/DKJ11112003ITA4332003_153928.pdf

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