Binding judicial directions control tax withholding relief; a tax authority cannot disregard them absent any stay.

A subordinate tax authority cannot refuse to act on binding judicial directions merely because the Department is considering further appeal, where no stay has been obtained. The Delhi HC found the rejection of the assessee's request for a nil tax withholding certificate under section 197 unsustainable because an earlier order in the same assessee's case for the same financial year had already directed relief. The impugned order was set aside, and the competent authority was directed to issue the nil withholding certificate within three days.

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Issues: Whether the order rejecting the application for issuance of a nil tax withholding certificate under section 197 of the Income-tax Act, 1961 was liable to be set aside and whether the competent authority could disregard binding directions already issued by the Court.

Analysis: The Court noted that the petitioner's request had been declined despite an earlier order passed in the petitioner's own case for the same financial year. The impugned order proceeded on the premise that the Department was considering whether to file an SLP, but no stay had been obtained and no legal basis existed to disregard the earlier binding directions. In these circumstances, the rejection was not sustainable.

Conclusion: The impugned order was set aside and the competent authority was directed to issue a tax withholding certificate at nil rate within three days, in favour of the assessee.

Final Conclusion: The writ petition succeeded and the petitioner obtained the requested nil withholding relief for the relevant financial year.

Ratio Decidendi: A subordinate authority cannot refuse to comply with binding judicial directions merely because the Department is considering further appeal, absent any stay or other legal bar.

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