Commissioner cannot ignore Binding High Court Precedent citing Pendency of Appeal at Supreme Court

By | December 13, 2025
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Commissioner cannot ignore Binding High Court Precedent citing Pendency of Appeal at Supreme Court

Issue

Whether the Commissioner, while exercising revisionary powers under Section 264, can refuse to follow a binding decision of the Jurisdictional High Court merely on the ground that the Department has appealed against that decision and the matter is pending before the Supreme Court.

Facts

  • Assessment Year: 2021-22.

  • The Trigger: The petitioner received an intimation under Section 143(1).

  • The Action: The petitioner filed a revision application under Section 264 seeking a refund with interest under Section 244A.

  • Commissioner’s Order: The Commissioner accepted that the revision petition was maintainable. However, he refused to grant relief, reasoning that the favourable judgment of the Jurisdictional High Court (in CIT v. Sheraton International Inc.) relied upon by the assessee was challenged by the Revenue and was pending consideration before the Supreme Court.

Decision

  • Binding Precedent: The High Court held that the decision of the Jurisdictional High Court is binding on all authorities within its jurisdiction.

  • Pendency is not a Stay: The Court reiterated the settled legal principle that the mere pendency of an appeal before the Supreme Court does not act as a stay on the operation of the High Court’s judgment. Unless the Supreme Court has explicitly stayed the order, the Commissioner is duty-bound to follow it.

  • Judicial Discipline: By refusing to follow the binding precedent, the Commissioner violated the principles of judicial discipline.

  • Ruling: Since the issue was covered in the assessee’s favour by the Sheraton International judgment (and subsequent judgments including the assessee’s own case), the Commissioner’s order was set aside, and the revision application was allowed.

Key Takeaways

Judicial Discipline: This is a potent argument in litigation. Assessing Officers often try to deny relief by saying, “The Department has not accepted the High Court ruling and has filed an SLP.” This judgment clarifies that until the Supreme Court grants a specific stay, the High Court’s order remains the law of the land for that jurisdiction.

Section 264 Scope: This case also reaffirms that a Section 264 revision is a valid remedy against a Section 143(1) intimation, which is a faster alternative to the standard appeal route (CIT(A)) in many clear-cut cases.

HIGH COURT OF DELHI
Shangri-La International Hotel Management Pte. Ltd.
v.
Commissioner of Income-tax (International Tax)*
V. Kameswar Rao and Vinod Kumar, JJ.
W.P.(C) No. 17355 OF 2025
NOVEMBER  14, 2025
Manuj Sabharwal, Devvrat Tiwari and Drona Negi, Advs. for the Petitioner. Siddhartha Sinha, SSC for the Respondent.
ORDER
CM APPL. 71407/2025 (Exemption)
V. KAMESWAR RAO, J. Exemption is allowed, subject to all just exceptions.
2. The application stands disposed of.
W.P.(C) 17355/2025
3. This petition has been filed with the following prayers:-
“a. Issue a writ in the nature of certiorari, mandamus or any other appropriate writ(s), order(s), directions(s) quashing the impugned order dated 26.03.2025 passed by the Respondent No. 1 (Annexure P-1) under s. 264 of the Incometax Act, 1961 with a direction to allow the application dated 28.04.2023 filed by the Petitioner and to issue further directions for grant of refund along with interest under s. 244A of the Act; and/ or”
4. The submission of learned counsel for the petitioner is primarily that the petitioner had filed an application on 28.04.2023 for revising the intimation/order dated 28.04.2022. The said order dated 28.04.2022 was issued under Section 143(1) of the Income Tax Act, 1961 (“the Act”) for the assessment year 2021-22. The submission is that though respondent no. 1 has accepted that the revision petition under Section 264 of the Act is maintainable in view of the decision of this Court in Vijay Gupta v. CIT ITR 643 (Delhi)and EPCOS Electronic Components S.A v. Union of India (Delhi), but denied the relief on the ground that CIT v. Sheraton International Inc.  (Del) is pending consideration before the Supreme Court.
5. Thus, the conclusion rendered by respondent no. 1 not giving the benefit of the order passed by this Court in the petitioner’s own case, on the argument that Sheraton International Inc. (supra) is pending consideration before the Supreme Court is clearly misplaced. In any case, it is his submission that the SLP before the Supreme Court has been closed on the ground of low tax effect.
6. Though, Mr. Siddhartha Sinha is unable to confirm this particular submission made by the counsel for the petitioner, we by taking the submission made by the counsel for the petitioner on record as, concededly the issue stands covered by the judgment in Sheraton International Inc. (supra), CIT v. Sheraton International Inc. [decided by this court on ITA 271 of 2023, dated 11-5-2023] and, CIT v. Starwood Hotels & Resorts Worldwide Inc. 2022:DHC:004730and also the Commissioner of Income Tax – International Taxation v. Shangri-LA International Hotel Management Pte Ltd. [ITAs 532 & 535 of 2023. dated 18-09-2023]hold that the result in this petition shall also be the same as was decided by this Court in the assessee’s own case and accordingly, the petition is allowed and the order dated 26.03.2025 passed under Section 264 of the Act for the assessment year 2021-22 is set aside. The application filed on 28.04.2023 is allowed. The CIT (Appeals) shall take consequential action, in accordance with law.
7. In view of the above, the petition is disposed of.