Hi @Nishith Suthar , I understand that you want to know how Azure Policy is inherited and applied.
Any assignment of user access or policy on the root management group applies to all resources within the directory. Source: Important facts about root management group.
Answer to your question: No. If a deny policy applies, the request will be denied, unless you define excluded scopes. Policies are inherited: management structure from higher to lower level, to subscription, to resource group, to resources.
Please refer to Azure Policy Assignment Structure.