Facts of the Case

The Revenue filed an appeal before the Delhi High Court under Section 260A of the Income-tax Act, 1961, against the order passed in favour of M/s T.T. Finance Ltd.

The principal 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 vs Bansal Credits Ltd. (2003) 259 ITR 69. Since the controversy stood concluded by a binding precedent, the Court examined whether any substantial question of law survived for adjudication.

During the hearing, counsel appearing for the Revenue submitted that the Supreme Court had issued notices in certain Special Leave Petitions involving a similar issue and, therefore, the matter deserved consideration.

 

Issues Involved

  1. Whether the Revenue’s appeal under Section 260A raised any substantial question of law requiring adjudication by the High Court?
  2. Whether the appeal could be entertained when the issue already stood concluded by a binding judgment of the Delhi High Court?
  3. Whether the pendency or issuance of notice in Special Leave Petitions on a similar issue justified reconsideration of an already settled legal position?

 

Petitioner’s Arguments (Revenue)

  • The Revenue sought to challenge the order in favour of the assessee by filing an appeal under Section 260A of the Income-tax Act, 1961.
  • It was argued that the Supreme Court had issued notices in certain Special Leave Petitions involving a similar controversy.
  • On that basis, the Revenue contended that the matter should still be considered despite the existence of a binding judgment of the Delhi High Court on the same issue.

 

Respondent’s Arguments (Assessee)

  • The assessee relied upon the binding decision of the Delhi High Court in Commissioner of Income-tax vs Bansal Credits Ltd. (2003) 259 ITR 69.
  • It was contended that the controversy had already been settled by the jurisdictional High Court.
  • Therefore, no substantial question of law survived for consideration under Section 260A.

 

Court Order / Findings

The Delhi High Court held that the issue sought to be raised by the Revenue already stood concluded by its earlier judgment in Commissioner of Income-tax vs Bansal Credits Ltd. (2003) 259 ITR 69.

The Court observed that where a question is already covered by a binding precedent, no question of law, much less a substantial question of law, survives for consideration in an appeal under Section 260A.

The Court further noted that the Supreme Court had subsequently dismissed the Special Leave Petitions filed both by the Revenue and by the assessee against the aforesaid judgment. Consequently, the judgment had attained finality.

In view of the settled legal position, the High Court declined to entertain the appeal and dismissed it.

 

Important Clarification

  • Mere issuance of notice in a Special Leave Petition does not dilute the binding effect of an existing High Court judgment.
  • Once the Supreme Court dismisses the Special Leave Petitions arising from the precedent relied upon, the legal position attains finality.
  • An appeal under Section 260A is maintainable only when a substantial question of law arises.
  • Where the issue is already settled by a binding precedent, no substantial question of law survives for adjudication.
  • The High Court is justified in dismissing such appeals at the threshold.

Sections Involved

  • Section 260A of the Income-tax Act, 1961 – Appeal to High Court
  • Reference to the precedent in Commissioner of Income-tax vs Bansal Credits Ltd. (2003) 259 ITR 69

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2003:DHC:18830-DB/DKJ10112003ITA4272003_153658.pdf

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