Kaveri Seed Company Limited vs. Principal Director of Income Tax

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WP/2641/2019HC TelanganaHBHC01005090201907 April 2026Author: P.SAM KOSHY,NARSING RAO NANDIKONDA6 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court of Telangana at Hyderabad dismissed the writ petition as withdrawn. The learned counsel for the petitioners prayed for withdrawal of the writ petition on the ground that the petitioners intended to appear before the concerned authority and ventilate their grievance on its own merits. The court granted liberty to the petitioners to approach the court again if the situation warranted at a later stage. Consequently, the writ petition was dismissed as withdrawn, with no order as to costs. All pending miscellaneous petitions were also closed. The court did not decide the merits of the issues raised.

What were the facts?

The petitioners, Kaveri Seed Company Limited and its Director Mr. C. Mithun Chand, filed a writ petition before the High Court of Telangana at Hyderabad. They challenged the "reasons to believe" recorded by the Principal Director and Additional Director of Income Tax (Investigation) under Section 132(1) of the Income Tax Act, 1961, and the subsequent search warrants dated January 3, 2018, and January 8, 2018. They also sought to quash notices dated January 16, 2019, issued by the Assistant Commissioner of Income Tax under Section 153A for assessment years 2012-13 to 2017-18, and to restrain further action. The assessment years in question are 2012-13 to 2017-18. The respondents are various Income Tax authorities and the Union of India.

What were the issues?

1. Whether the "reasons to believe" recorded by the Principal Director and Additional Director of Income Tax (Investigation) under Section 132(1) of the Income Tax Act, 1961, were arbitrary, without jurisdiction, illegal, malafide, and for a collateral purpose. 2. Whether the search warrants dated January 3, 2018, and January 8, 2018, issued by the Principal Director and Additional Director of Income Tax (Investigation) were arbitrary, without jurisdiction, and illegal. 3. Whether the consequent searches on the petitioners' premises were arbitrary, without jurisdiction, and illegal. 4. Whether the notices dated January 16, 2019, issued by the Assistant Commissioner of Income Tax under Section 153A for the assessment years 2012-13 to 2017-18 should be quashed. The petitioners argued that the "reasons to believe," warrants, and searches were illegal and arbitrary. The revenue's contentions are not recorded in the provided text.

Which sections of the Income-tax Act were involved?

Section 132(1),Section 153A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
13471 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Jurisdiction) TUESDAY, THE SEVENTH DAY OF APRIL TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION NO:264r OF 2019 Between: 1 2 Kaveri Seed Company Limited' No.5138,5th Floor, Minerva Complex S'D Road' Qecunderabad, SfiOOfig nep Oy its Director Mr'-C' Mithun Chand Irrtr. C. Mithun Chand, S/o Late C.Bhaskar Rao Aged about 42 Years' Occ i,jrnrging Dir".tor Kaveri Seed company Limited No.5138. 5th Floor, Minerva comptefs.o.Road, Secunderabad, 500003 ...'ET,T,ONERS AND 1. Principal Director of lncome Tax, (lnvestigation) lncome Tax Department Aayakar Bhavan, Basheerbagh Hyderabad 500004' . Z. nOUitionat Director of lncoire tax (lnvestigation), lncome Tax Department Aayakar Bhavan, Basheerbagh Hyderabad 590991 . 3.AssistantCommissionerofln.comeTaxCentralcircle.l(1),HyderabadAayakar Bhavan, Basheerbagh Hyderabad 500004 4. Union of lndia Union of lndia, Department of Revenue, Represented by its Secretary (Revenue)' North Block, New Delhi' ...RESPONDENTS Petition under Ariicle 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 a writ, order or direction in nature of writ of Mandamus calling for the relevant records from the respondents and (i) declaring the reason to believe purportedly recordedbylstand2ndrespondentsu/S.132(1)ofincomeTaxActasbeingarbitrary' without jurisdiction, illegal, malafide and for collateral purpose, and (ii) declare the I warrants of authorisation dated 3.1.2018 and 8.1.2018 issued by 1st and 2nd respondents respectively as arbitrary,'without jurisdiction and illegal, and (iii) declare the consequent searches on petitioners premises as arbitrary, without lurisdiction and illegal, and (iv) consequently, quash the notices dated 16.1 .20'l 9 issued by 3rd respondent u/s.153A for the assessment years 2012-13 to 2011'-18, and (v) restrain the respondents from initiating any further action pursuant to said serarches. l.A. NO: 1 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the notices dated 16.1.2019 issued by 3rd respondent u/s. 153A for the assessment years 2012-13 to 201 7-1 8 pursuant to search and seizure proceedings. l.A. NO: 2OF 2019 Between: 1. Principal Director of lncome Tax, (lnvestigation) lnc;ome Tax Department Aayakar Bhavan, Basheerbagh Hyderabad 500004. 2. Additional Director of lncome Tax (lnvestigation), lnr;ome Tax Department Aayakar Bhavan, Basheerbagh Hyderabad 500004. 3. Assistant Commissioner of lncome Tax Central Circle-'l (1 ), Hyderabad Aayakar Bhavan, Basheerbagh Hyderabad 500004 4. Union of lndia Union of lndia, Department of Revenue, Represented by its Secretary (Revenue), North Block, New Delhi. ...PETITIONERS/RESPONOENTS AND 1. Kaveri Seed Company Limited, No.5138, 5th Floor, Minerua Complex S.D.Road, Secunderabad, 500003 Rep.by its Director Mr. C. Mithun Chand 2. Mr. C. Mithun Chand, S/o Late C.Bhaskar Rao Aged about 42 Years, Occ. Managing Director Kaveri Seed Company Limited No.5138, 5th Floor, Minerva Complex S.D.Road, Secunderabad, 500003 ...RESPONDENTS/PETITION ERS Petition under section 'r51 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to vacate the interim order daled 02-12-2019 passed in rA.No. 1 of 2o1g in wp.No. 2641 o,t 2019 in the interest of justice. Counsel for the petitioners: SRI C.V.NARASIMHAM counser for the Resoondent Nos.l To 3' sRr'J.v.i;-hASAD, SC FOR TNCOME TAX Counset for the Respondent No.4: DEpuTV boi,;t'ion ceruenaL oF tND,A

// IN THE HIGH COURT FOR THE STATE OF I'ELANGANA AT HYDERABAD THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA W.P.No.2641 OF 2019 07.04.2026 Between Kaveri Seed Company Limited, Rep. by its Director Mr. C.Mithun Chand and another . . . Petitioners AND Principal Director of Income Tax (lnvestigation), Income Tax Department, Aayakar Bhavan, Basheerbagh, Hyderabad - 500 004 and 3 others ...Respondents ORDER, (per Hon'ble Sri Justice P.Sam Koshy) Mr. C.V.Narasimham, learned counsel for ttre petitioners prays for withdrawal of the writ petition on the ground that the petitioners intend to appear before the authority concemed and ventilate their grievance on its own merits, reservinl; the right of \

2 the petitioners to approach this court in the event if the situation so warrants at a later stage.

2.

The writ petition, accordingly, stands dismissed as withdrawn with the aforesaid liberty. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. T.SREENIVASA REDDY ASSISTANT REGISTRAR //// G SECTION OFFICER To '

1.

One CC to SRI C.V.NARASIMHAM, Advocate [OPUC]

2.

One CC to SRI J.V.PRASAD, SC FOR INCOME TAX [OPUC]

3.

One CC to DEPUTY SOLICITOR GENERAL OF INDIA [OPUC]

4.

Two CD Copies PSK. TKS \q-

HIGH COURT DATED: 0710412026 ORDER WP.No.2641 of 2019 .)' .5 I mo),''u+ \, -r( \ SG. J.;r. .( vr ,l \ --'= C?] JLFq q. ,V1 -k .?,13 ii, DISMISSING THE WRIT PETITION AS WITHDRAWN WITHOUT COSTS rre l.o F"t

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