JARNAIL SINGH,VILLAGE BHAGWANPUR, KALKA vs. ITO, WARD-2, PANCHKULA

ITA 1025/CHANDI/2025Status: DisposedITAT Chandigarh11 November 2025AY 2015-1668 pages
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What did the Tribunal hold?

The Tribunal held that subordinate authorities are bound by the orders of higher appellate authorities, including the Tribunal and the Supreme Court, and cannot refuse to implement them without obtaining a stay or other appropriate direction. The Tribunal deprecated the Assessing Officer's stand that issues were not final if under appeal, calling it objectionable. Furthermore, the Tribunal emphasized that all authorities are bound by the law declared by the Supreme Court under Article 141 of the Constitution and cannot evade its effect by finding distinguishing features. Regarding the applicability of Section 56(2)(viii), the Tribunal held that it could not sit in appeal over or test for per incuriam a judgment of the High Court. Therefore, decisions of High Courts upholding the applicability of Section 56(2)(viii) post-amendment could not be disregarded, and the assessee's argument that such judgments were per incuriam was rejected. Consequently, the common legal ground was decided against the assessees, leading to the dismissal of their appeals. The Tribunal did not find it necessary to adjudicate upon individual grounds as they had become academic.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A', heard multiple appeals filed by various assessees and the Revenue. The appeals concerned assessment years ranging from 2012-13 to 2018-19. The core of the dispute revolved around the applicability of Section 56(2)(viii) of the Income Tax Act, 1961, following amendments. The Assessing Officers had taken a stand that if the Tribunal's decision for a particular assessment year was appealed, the issue had not attained finality, and they also attempted to distinguish Supreme Court decisions. The Tribunal had to decide on the binding nature of higher judicial pronouncements on subordinate authorities and the correct interpretation of Section 56(2)(viii).

What were the issues?

1. Whether the Assessing Officer is bound by the decisions of higher appellate authorities, including the Tribunal and the Supreme Court, even if their own orders for a specific assessment year are under appeal, and whether they can refuse to implement such orders without obtaining a stay or other appropriate direction from the appellate authority (Question of law). 2. Whether the Assessing Officer can evade the binding effect of a Supreme Court decision by attempting to find distinguishing features, in light of Article 141 of the Constitution of India (Question of law). 3. Whether the Tribunal can question the binding force of a High Court judgment on the ground of alleged oversight or per incuriam, and whether decisions of Hon'ble High Courts upholding the applicability of Section 56(2)(viii) post-amendment can be disregarded (Question of law). Assessee's arguments: The assessee contended that the Assessing Officer's stand regarding the non-finality of issues under appeal was incorrect and that the Assessing Officer could not distinguish Supreme Court decisions. They also argued that High Court judgments upholding Section 56(2)(viii) were per incuriam. Revenue's arguments: The Revenue argued that the Assessing Officer was justified in their actions and that the Tribunal should follow the High Court judgments upholding Section 56(2)(viii).

Which sections of the Income-tax Act were involved?

Section 56(2)(viii)

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Cases cited in this judgment(27)Show list

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Heard together (3 matters)

ITA No. 463/Chd/2023
ITA No. 1043 /Chd/2019
ITA No. 1044/Chd/2019

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अधिकरण, चण्डीगढ़ न्यायपीठ “ए”, चण्डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE/HYBRID MODE/VIRTUAL MODE श्री ललित कुमार, न्यायिक सदस्य एवं श्री कृणवन्त सहाय, लेखा सदस्य BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM Shri Ajay Kumar आयकर अपील सं. / ITA No. 463/Chd/2023 निर्धारण वर्ष / Assessment Year: 2018-19 341, Matana, Fatehabad, Haryana-125050 स्थायी लेखा सं./PAN NO: AYJPK1793R अपीलार्थी/Appellant निर्धारिती की ओर से / Assessee by : राजस्व की ओर से / Revenue by : बनाम The ITO Ward-1, Fatehabad प्रत्यर्थी / Respondent Shri Suraj Bhan Nain, Advocate Shri Manav Bansal, CIT, DR आयकर अपील सं. / ITA No. 1043 /Chd/2019 निर्धारण वर्ष / Assessment Year : 2012-13 Amrinder Singh Khubber S/o Shri Dilbagh Singh, Vill: Shahpur, Ambala Cantt स्थायी लेखा सं./PAN NO: CAYPK4198R अपीलार्थी/Appellant बनाम The ITO Ward-5, Ambala प्रत्यर्थी/Respondent आयकर अपील सं. / ITA No. 1044/Chd/2019 निर्धारण वर्ष / Assessment Year: 2013-14 Amrinder Singh Khubber S/o Shri Dilbagh Singh, Vill: Shahpur, Ambala Cantt स्थायी लेखा सं./ PAN NO: CAYPK4198R अपीलार्थी/Appellant बनाम The ITO Ward-5, Ambala प्रत्यर्थी/Respondent निर्धारित

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