PARADISE FOOD COURT PRIVATE LIMITED vs. Deputy Commissioner of Income Tax

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WP/2799/2026HC TelanganaHBHC01003671202630 April 2026Author: P.SAM KOSHY,NARSING RAO NANDIKONDA12 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. The Court found significant force in the revenue's arguments regarding the delay in filing the writ petition and the availability of an alternative statutory remedy. The Court noted that the writ petition was filed more than 5 years after the impugned intimation dated November 11, 2019. Furthermore, the petitioner had already availed the remedy of a first appeal before the CIT(Appeals) against the dismissal of their appeal due to delay in challenging the Section 143(1) intimation. The Court held that the petitioner ought to have challenged the CIT(Appeals)'s order before the ITAT under Section 253 of the Act, rather than bypassing this remedy and approaching the High Court via a writ petition. The Court stated that writ jurisdiction is not to be exercised as a matter of routine and is reserved for exceptional circumstances. The cited judgments by the petitioner were distinguished based on their facts. The Court explicitly stated it would not venture into the merits of the case, reserving the petitioner's right to avail the appeal remedy before the ITAT.

What were the facts?

The petitioner, Paradise Food Court Private Limited, filed a writ petition in the High Court of Telangana challenging an intimation dated November 11, 2019, passed under Section 143(1) of the Income Tax Act, 1961, for Assessment Year 2018-19. The petitioner argued that the respondent had already passed an assessment order under Section 143(2) on September 23, 2019, and therefore, proceedings under Section 143(1) should have merged and ceased. The petitioner contended that the adjustments made under Section 143(1) amidst scrutiny proceedings were unlawful. The respondents argued that the writ petition was filed with significant delay (over 5 years) and that the petitioner had an alternative statutory remedy of appeal before the Income Tax Appellate Tribunal (ITAT). The petitioner had previously appealed to the CIT(Appeals) against the delay in filing the appeal against the Section 143(1) intimation, which was dismissed.

What were the issues?

1. Whether the intimation passed under Section 143(1) of the Income Tax Act, 1961, is valid when an assessment order under Section 143(2) of the Act has already been passed for the same assessment year (AY 2018-19)? - Assessee's contention: The recourse to Section 143(1) is precluded after regular assessment proceedings have commenced under Section 143(2). An intimation under Section 143(1) does not carry the legitimacy of assessment proceedings once Section 143(2) proceedings are initiated. Making adjustments under Section 143(1) during ongoing scrutiny under Section 143(2) is capricious and unlawful. The exercise of power under Section 143(2) precluded the respondent from proceeding under Section 143(1), rendering the intimation without jurisdiction. - Revenue's contention: The writ petition suffers from delay and latches, having been filed over 5 years after the impugned intimation. The petitioner has an alternative statutory remedy of appeal before the ITAT, which was not availed after the CIT(Appeals) dismissed the appeal on grounds of delay.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(2),Section 143(3),Section 154,Section 253

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
13447l IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERAB.AD (Special Original Jurisdiction) THURSDAY, THE THIRTIETH DAY OF APRIL TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE ltlhRSlNG RAO NANDIKONDA WRIT PETITION NO: 2799 oF 2026 Between: Paradise Food Court Private Limited, 1-7-1 86 to 193, Secunderabad' Telangana - 500003 Rep., by its Jirnmy Ashok Oza S/o Shri Ashok Ramchandra Oza, aged about 46 years, Fl/o. H.No.1-7-186 to '193, Paradise Circle, S .D. Road, Secunderabad, Telangana, lndia, 500003 ...PETITIONER AND 1. Deputy Commissioner of lncome Tax, Circle - 5('1), Hyderabad 2. Deputy Commissioner of lncome Tax, CPC Central Processing Center lncome Tax Department ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue writ in the nature of Certiorari or any other appropriate writ, order or direction quashing lmpugned intimation daled 11 .11 .2019 (Annexure P/2) passed under section 143(1 ) of the Act in relation to Assessment Year 2018-19. 2. Alternatively, Petitioner prays for issuance of a writ in the nature of certiorari or any other appropriate writ, order or direction to Respondents and / or appropriate appellate authorities to consider validity of adjustments made in impugned intimation u/s 143(1) of the Act on merits as part of scrutiny assessment proceedings and pass speaking orders on deductibility applying provisions of the Act in relation to Assessment Year 2018-19. 3. Grant such further and other appropriate reliefs or --- directions including directions for condonation, if necessary, as the Petitioner may be entitled to in law as deemed appropriate by this Hon'ble Court to render substantial justice. Counsel for the Petitioner : SRI VENKATRAM REDDY MAN']-UR Counsel for the Respondents: SRI Fi.SUDHAKAR REDDY (SR'SC FOR lT)

i The Court made the following: ORDER

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TTIE HON'BLE SRI JUSTIC E P.SAM KOSHY AND THE HON,BLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION No.2799 of2026 DATE: 30.04.2026 Between: Paradise Food Court Private Limited' ... Petitioner AI{D Deputy Commissioner of Income Tax' Ciicle - 5(1), Hyderabad and another' . .. Respondents ORDER: ry)cr lhe Hon hle SriJttsttcc P'So Kosllr') Heard Mr- Nageshwar Rao, leamed counsel appearing on behalf of Mr' M' Venkatram Reddy, tearned counsel for the petitioner; and Mr' K' Sudhakar Redd5" learned Senior Standing Counsel for Income Tax Department appearing on behalf of the lesPondents

2.

The instant is a writ petition filed by the petitioner under Article 226 of the Constitutionoftndiaassailingtheimpugnedintimationdatedlt.ll.20lgissuedby

- the respondent No.2 under Section 143(1) of the Income Tax Act, 1961 (for short 'the Act') for the assessment year 201 8- l9

3.

The substantial ground on which the writ petition has been filed is that prior to passing of the impugned intimation under Section 113( l) of the Act, the Department itsetf had already passed an order of assessment under Section 143(2) of the Act on 23.09.2019, which was also taken for scrutilv assessmenl and the retums submitted by the petitioner were found to be proper. l'herefore, once when the order of assessment has been passed under Section )13(2) of the Ac1, proceedings initiated under Section 143(1) of the Act autornatically gets merged, which in the instant case has not been adopted by the Depz:rtrnent and have even though passed an order under Section 143(2) of the Ac.., continued with the proceedings under Section 1 43( 1 ) of the Act and passed the irnpugned intimation.

4.

Leamed counsel for the petitioner contended that th: recourse to Section 143(l) of the Act is precluded after the regular assessmenr proceedings and an intimation under Section 143( I ) does not carry the legitimacy of assessment proceedings. Leamed counsel for the petitioner further contended that the courts have consistently held that once when the proceedings under Section 143(2) and Section la3(3) of the Act have been commenced by issuance of notice under - Page 3 of9 Section 143(2) of the Act, it is a limitation on the jurisdiction of the Assessing Officer to proceed under Section 143(l )(a) of the Act.

5.

It was contended by the learned counsel for the petitioner that making adjustment to declared loss on pretext of invoking Section 143(l) of the Act in the midst of ongoing scrutiny proceedings under Section 1a3(2) of the Act is capricious, unlawful and in violation of the principles of natural justice. Further, the CIT (Appeals) holding that there is no merger of intimation into regular assessment but only loss determined in intimation under Section 143(l) of the Act is merely considered in computation of income is also ex-facie arbitrary illogical, unjust and unlawful.

6.

Lastly, the learned counsel for the petitioner contended that the exercise of power under Section I 43(2) of the Act by respondent No. I on 23.09.2019 deprived or precluded respondent No.2 from proceedings under Section 143(1) of the Act. As such, the impugned intimation was passed without jurisdiction and is nullity in the eyes of law

7.

In support ofthe aforesaid contentions, the leamed counsel for the petitioner relied upon the judgments of the Hon'ble Supreme Court in the case of Vodafone Idea Limited (earlier known as vodafone Mobile services Limited) vs.

-\ Assistant Commissioner of Income Tax, Circle 26(2) and Anotherr and Tamil Nadu Magnesite Ltd. vs. The Commissioner of Income-Tax and Another2'

8.

Per contro, the learned Senior Standing Counsel for [n':ome Tax Department submitted that the writ petition deserves to be dismissed on tvro major grounds.

9.

Firstly, the writ petition has been filed at a muQh belatr:d stage and therefore suffers from detay latches. Referring to the relief clause in the writ petition, the leamed Senior Standing Counsel for Income Tax Depallnrent submits that the order under challenge is one rvhich was passed as early as c,n 11.11.2019 and the present writ petition has been filed only in the year 20-16. to be precise on 29.01.2026. Thus, the writ petition is being filed afier mot'e than 5 years and therefore the writ petition deserves to be dismissed on this grt'und itself.

10.

The second ground on which the leamed Senior Sitanding Counsel for Income Tax Department sought for dismissal of the l{rit petition is that the petitioner has an altemative statutory remedy of appeal availablc before the Income Tax Appellate Tribunal (for short the 'ITAI'). According to the learned Senior Standing Counsel for Income Tax Department, the petitione r knowing lully r'vell the statutory remedies available to him has now come to the I{igh Court, in fact ' 1ZOZO1 I 9 Supreme Court Cases 12 ' zot o scc online Mad 4450

- Page 5 of9 after having failed at the level of the Commissioner of lncome Tax (Appeals) (for short .clT (Appeals)') which itself would go to show that the petitioner has already availed the remedy available under the statute and the very same statute also prescribes for yet another remedy ofsecond appeal before the ITAI, which the petitioner did not avail. ll. Having heard the contentions put forth on either side and on perusal of records, parlicularly taking into consideration the facts and submissions narrated in the writ affidavit, it is evidently clear that proceedings under Section 143(2) of the ACtwereinitiatedbytheDepartmentvidenoticedated23.og.20lg.Thepetitioner entered appearance and submitted his response to the said notice on 08.10.20,|9 and finatly an order under Section 143(3) of the Act was passed on 31'03'2021 acceptingtheretumssubmittedbythepetitioner.Thereseemstobecertainemors which have crept in the order passed by the Department and were sought to be rectified under Section 154 of the Act on more than a couple of occasions' which were partially accepted by the Department, against which also remedy of appeal was availed by the petitioner and that proceedings went on independently' However, in between intimation under Section 143(1) was issued on 11'11'2019' Admittedty, the petitioner had not challenged the same before any judicial forum assailing the competence and jurisdiction of the authorities in continuing with Section 143( I ) proceedings in spite of the notice having been sent under Section - 143(2) and order having been passed under Section 143(l). At a much belated stage, the petitioner did file an appeal before the CIT (Appeals) on 25.09.2024 and the CIT (Appeals) having found the delay in filing of appeal against the intimation dated 11.11.2019 to be more than 1751 days, dismissed the appeal vide order 24.09.2025 on the ground of delay. Yet another aspect nhich needs to be considered is that even though the appeal stood decided on 24.09.2025, the petitioner ven- well knou,s that there is a further remedl, of appeal before the I'IA1'. l'herefore, the petitioner ought to have gone to the ITAT challenging the order dated 24.09.2025 instead of preferring a writ petition

12.

This Bench finds much force in the argument of the li:arned Senior Standing Counsel for Income Tax Department when he raised an objr:ction of the petitioner having not gone to the ITAT for ventilating his grievance and bvpassing the said remedy has chosen to seek writ rernedy. It is well settled Frroposition of law that rvrit jurisdiction under Article 226 of the Constitution of India is not to be exercised as a matter of routine. The said remedy is to be erercised onty in exceptional circumstances where there is a breach of fundamental rights or there is a violation of the principles of natural justice or where the very competence and jurisdiction ofthe authority which has passed the order is unrler dispute.

- Page 7 of9 13. what needs to be appreciated at this juncture, as has been discussed in the preceding paragraphs is that, the substantive relief which the petitioner has sought for is against the intimation dated 11.11.2019 issued Section 143(1) of the Act' The writ petition is now being filed after more than 5 years. In between, the petitioner cannot be said to be ignorant of the provisions of law as the petitioner has been prosecuting his case before the authority concemed against the proceedings drawn under Section 143(2) of the Act and the consequential order thereafter being passed under Section 1a3(3) of the Act. This itself goes to show that the petitioner has deliberatety not chosen to challenge the said proceedings which indirectly gives an indication of the petitioner not having substantive grievance on the so-called intimation issued under Section 143( 1) of the Act' 14.ThereisalsomuchforceintheargumentoftheleamedSeniorStanding CounselforlncomeTaxDepartmentthatagainsttheorderpassedbytheClT (Appeals) there is a remedy available under Section 253 of the Act before the ITAI, and the petitioner having already availed the remedy of first appeal available under the statute, there is no reason why the petitioner should not be permitted to relegate his rernedy available under Section 253 of the Act before the ITAL IT would had been a different case altogether if the petitioner at the first instance would had approached the writ court in the year 2019 itself or within a reasonable period of time from 11.11.2019 assailing the competence and jurisdiction of the authorities

- Page 8 of9 in continuing with the proceedings under Section 143(1) uhen the proceedings under Section 143(2) and 143(3) have already been passed, u'hich the petitioner did not avail. Having availed the remedy of appeal as is provided under the Act, it would be more appropriate if the petitioner ought to have challenged the order of the CIT (Appeals) by way of an appeal before the ITAT.

15.

So far the judgment cited by the learned counsel for the petitioner in his pleadings so far as reliance on the judgment of the Hon'ble Supreme Court in the appeal and bypassing the remedy ofsecond appeal approach:d the High Courl.

16.

Since the objections raised by the leamed Senior Standing Counsel for Income Tax Department was on the very tenability and maintainability of the writ petition, this Bench does not intend to venture into the rnerits of the case and reserving the right of the petitioner to avail the right ofappeal under Section 253 of the Act, the instant writ petition stands dismissed. t lzooa; z scc 107

- 17. As a sequel, miscellaneous petitions pending if any, shall stand closed However, there shall be no order as to costs' AHMED ABDULLAH KHAN AS TANT REGISTRAR /i// S CTION OFFICER To,

1.

The Deputy Commlssioner of income Tax, Circle - 5(1), Hyderabad 2.TheDeputyCommissioneroflncomeTax,CPCCentralProcessingCepter , 5:::""i::?iiffIril+*. REDD' MANruR, Advocate toPUCl

4.

One CC to SRI K.SUDHAKAR REDDY (Sr SC FOR INCOME TAX)' [OPUC]

5.

Two CD Copies. BSK BM+

HIGH COURT DATED: 3010412026 1 ( io 04 Ut ORDER WP.No.2799 of 2026 DISMISSING THE WRIT PETITION WITHOUT COSTS H E sl.r-:\ 'or\ /\a'\(', A1]] M ?I ' ),t . )l ;" i/ t. 1nrsr,..*^tn)/; ^J T o,lrl rc

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