However, in case of conflict between the Act and the Rules, the provisions of the Act shall prevail. 3.Circulars issued by the CBDT For the guidance of the Income Tax Officers and the general public, the CBDT issues circulars on certain taxation matters. These circulars are binding on the Income Tax Officers. In event of a dispute, the Courts are not bound by the circulars. 4.Case Laws and Doctrine of Precedents Decisions of the tax tribunals and courts on disputes pertaining to aspects of the income tax law form case laws.
Case laws result in formation of precedents in law.
The decisions of the Supreme Court, however, are binding on all lower Courts and tax authorities in India. High Court decisions are binding only in the states, which are within the jurisdiction of that particular High Court. However, decision on one High Court has persuasive power over other High Courts when deciding similar issues. It is essential to understand certain basic concepts in order to understand Income Tax law in India. The Act has defined certain terms, which have been used in the law.