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<h1>Binding judicial directions control tax withholding relief; a tax authority cannot disregard them absent any stay.</h1> A subordinate tax authority cannot refuse to act on binding judicial directions merely because the Department is considering further appeal, where no stay ... Rejection of application u/s 197 for issuance of Tax Withholding Certificate at ‘Nil’ rate - whether competent authority could not reject the petitioner's application for a tax withholding certificate at Nil rate by disregarding an earlier direction issued by the High Court in the petitioner's own case for the same financial year merely because the Department was contemplating filing an SLP? - HELD THAT: - The Court held that the impugned order was contrary to the earlier order passed by the High Court in the petitioner's own case for the same financial year. A binding direction of the High Court could not be ignored on the ground that the Department was thinking of, or was in the process of, preferring an SLP, particularly when no stay had been obtained. The authority's refusal to follow the Court's direction was therefore unsustainable. [Paras 5, 6, 7, 8] The impugned order rejecting the application u/s 197 was set aside, and the competent authority was directed to issue the tax withholding certificate at Nil rate within three days. Final Conclusion: The writ petition was allowed. The Court set aside the rejection of the Nil-rate withholding certificate and directed issuance of the certificate for the financial year 2025-26 within three days. 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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