The High Court · 2025

Counsel for the Petitioner: SRI P. SOMA SHEKAR REDDY Counsel forthe Respondent No. 1: SRI N. BHUJANGA RAO, DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent Nos. 2&3: SRI N. PRAVEEN REDDY, SENIOR SC The Court made the following: ORDER 1 I I THE I{ON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P. No. 21770 of 2O24 O R D E R: /Per the Hon'bLe Sri Justice Sud.data Chalapathi Rao) The present Writ Petition is filed '"vith the following prayer: '1) issue a Wit, Order of Direction more particularty, in the na.ture of Wnt of Certiorari, settirlg aside the Orders of the Lower Authorities as lacking in jurisdiction, being against tlrc laut laid bg the Hon'ble Supreme Court irt PCIT u. Abhisar Buildutell; 2) set aside the consequent orders and proceedings for recouery of demand including the consequent penalties leuied; 3) and to pass such other order..."

2. 'The brief facts of the case are that, the petitioner is a non- banking linalcial company registered as a Core I vestment Company with the Reserve Bank of India under Registration No. N-09.00438. It hled its return of income for the assessrnent year 2016-17 on 17.1O.2016, admitting a loss of Rs.89,88,52,472/-, which was processed under Section 1a3(1) of the Income Tax Act, 1961 (for short, "the Act"), accepting the returned loss. 2

3. Further, a sea-rch and seizure operation was conducted on 04.01.2018 in the Group of M/s Nuziveedu Seeds Limited, which also covered the petitioner's company. Pursuant thereto, a notice under Section 153-A of the Act was issued on 22.01.2019 and in response to it, the petitioner filed its return for the assessment year 2016-17 on 16.02.2019, declaring the loss of Rs.89,88,52,4721 -. Thereafter, the Assessing Officer completed the assessment under Section 143(3) read with Section 153-4 of the Act on 30.12.2019, making an addition of Rs.20,44,42,762/- towards disallowance under Section 14,{ of the Act, and assessed the loss at Rs.40,97,70,767 l- by passing appropriate orders.

4. Aggrieved thereof, the petitioner preferred an appeal belore the Commissioner of Income Tax (Appeals)-11, Hyderabad (for short 'CIT(A)') in Appeal No. 10362/2O19-20 for the assessment year 2016-77. The CIT(A), by order, dt.O8.12.2O21, affirmed the assessment order arrd assailing the same, the petitioner filed a further appeal before the Income Tax Appellate Tribunal, Hyderabad (for short 'ITAT') in ITA No.26lHyDl2O22. Further, the subsequent assessm ent yeal, of 2012_19, for similar I i i disallowance by the Assessing Authority, which was affirmed by the CIT(A), the petitioner filed an appeal in ITA No.27lHyD/2022.

5. Both orders of the CIT(A) were challenged before the learned ITAT and the learned ITAT, after appreciating the evidence on record dismissed both the said appeals i.e., ITA.No.26lfNDl2022 and ITA.No.27 /HYDI 2022, by a common order, dt.26.09.2022, affirming the orders of the CIT(A).

6. Now in the instant q,rit petition, the writ petitioner assails the order passed by the learned ITAT in ITA.No.26IHYDl2O22, dt.26.O9.2O22, inter alla contending that the lower Appellate Authorities and the Assessing Authority have erroneously passed the orders without appreciating the factua,l issues in proper perspective and failed to consider the orders of the Hon'ble Apex Court in PCII a. Abhisar Buildutell Put. Ltd..l and prayed to set aside the order of learned ITAT in ITA.No.26lHYD /2022, dt.26.O9.2O22 and also the orders of both the CIT(A) and Assessing Authority. I (2023) SCC Online SC 481 = (202412 SCC 433 4 7 . The respondents hled a counter affidavit contending that since an effective alternate remedy of appeal under Section 260-A of thc Act is available before this Court, fiiing of the Writ Petition amounts to abuse of process of law and a misuse of writ jurisdiction under Articl e 226 of the Constitution of India. It is further stated that the present Writ Petition is not maintainable, as there is no arbitrariness, excess of jurisdiction, or violation of the principles of natural justice, and that the plea of lack of jurisdiction and alleged violation of natural justice is merely an attempt to bypass the statutory appellate remedy by making a feeble attempt to indirectly achieve what they could not achieve directly. The respondents also point out that the judgment of the Honble Apex Court in PCffs case (supra) was delivered on

24.04.2023 i.e., subsequent to the ITAT's order, dt.26.O9.2O22, and hence cannot be applied retrospectively to the orders that had already attained finality, more so the orders of the learned ITAT are appealable under Section 260-A of the Act. Therefore, invoking the writ jurisdiction of this Court under Article 226 of tne Constitution of India re\zing on the decision of the Honble Apex Court in PCI?'s case(supra) after a lapse of nearly more than two 5 yea'rs' is against to the judicial precedents, and hence the writ Petition is not maintainable ancl is liable to be dismissed. B. Heard Sri P.somasekhar Reddy, learned counsel for petitioner, Sri N.Bhujanga Rao, learned Deputy Solicitor General of India for respondent No.l, and Sri N.Praveen Reddy, learned Senior Standing Counsel appearing for respondent Nos.2 & 3.

9. The learned counsel for the petitioner mainly contended that, in PCI?'s case (supra), the Hon'ble Apex Court has categorically held that in the absence of any incriminating material, the assessing authority lacks jurisdiction under Sections 132 or 132A of the Act, and that in the cases of completed or unabated assessments, additions can be made only on the basis of incriminating material found during the search. It was further submitted that in such cases, the only recourse available to the Revenue is to initiate reassessment proceedings under sections 147/l4SoftheAct,subjecttofulfillmentoftheconditions prescribed therein and that in the instant case of the writ petitioner no incriminating material was found and in the absence of the same, tlee auttrorities lack jurisdiction to resort to pass the 6 impugned Proceedings, and thus contends that the case of the the factual matrix of PCIfs petitioner squarelY fall under case(supra) and that entire proceedings are vitiated by procedure and lau,, as authorities acted beyond their jurisdjction'

10. The learned counsel further submitted that the assessing authority as u'ell as the appellate authorities failed to follow the legal mandate and dismissed the petitioner's appeals without proper appreciation of the facts or application of the ratio laid down by the Hon'lcle Apex Court in PCfTs case(supra), thereby causing grave injustice to the petitioner, and prayed this Court to allow the writ petition by setting aside the impugned orders of the assessing authority as well as the appellate authorities.

11. Per contra, Sri N. Praveen Reddy, learned Senior Standing Counsel for the respondents, submitted that for both the assessment 1'ears i.e., 2016-L7 and 2Ol7-18, the very same contentions were raised by the assessee before the CIT(A) and before the learned ITAT, and the said contentions were rejected by orders dated 08.12.2021 and26.O9.2022 respectively. Further, as against the order in ITA No.26/HYD/2O22 for assessment year 7 2016-17, the petitioner has filed the instant writ petition instead of availing the alternative statutory remedy of appeal under Section 260-A of the Act. In fact, for the subsequent assessment year 2OL7-18 as against the order passed by the learned ITAT in ITA.No.27/HYD / 2022, dt.26.09.2022, the writ petitioner availed the remedy of appeal under Section 260-A of the Act by filing ITTA No.39 of 2025 along with a petition for condonation of delay of BOO days, and thus, the instant writ petition filed, is nothing but a feeble attempt to gain ground indirectly, which they cannot achieve directly by surpassing the appeal provision under the Act.

12. Learned Senior Standing Counsel further submitted that it is a settled principle of law that a writ petition is not maintainable wheh an effective and efficacious alternate remedy is available under the statute. Reliance was placed on the judgment of the Hon'ble Apex Court in Commissi oner o,f Income Tax & Others a. Chhabil Dcss Agarual2, wherein it was held that rvrit jurisdiction under Article 226 of the Constitution can be invoked only in exceptional circumstances, such as when the statutory remedy is illusory, when there is a violation of the principles of 2 {2014} t SCC 603 I B natural justice, or when the authority has acted without jurisdiction.

13. Learned Senior Standing Counsel further contended that n one of the exceptions arise in the present iase and that the remedy of appeal provided under Section 260-A of the Act is comprehensive to address all questions of law. Since the petitioner has already invoked the said remedy under Section 26O-A of the Act for the subsequent assessment year 2OL7-18, frling the present writ petition selectively for the earlier assessment year of 2016-17 amounts to br.-passing the statutory appellate procedure by adopting different modes of challenge to a common order passed by the learned ITAT. Hence, the writ petition is not maintainable and is liable to be dismissed 14 . We have given earnest consideration to the submissions made on either side, and perused the record.

15. The mairr contention of the learned counsel for the petitioner is that the assessing authority and the appellate authorities failed to consider and applv the principles laid down by the Hontle Apex Court in PCf?'s case (supra), and contends that the said 9 amthorities erred in passing the impugned orders, and hence, the petitioner, by the present Writ Petition, challenges the common order dated 26.09.2022 passed by the learned ITAT insolar as ITA No.26/FfYD/2022 for the assessment year 2016-77. He further contends that, as both the appellate authorities arrd the assessing authority have contravened the procedure, and acted beyond their scope of jurisdiction, as such the writ petition is maintainable. i6. On a perusal of the record, it is evident that the petitioner has filed an appeal before this Court against the common order ol the learned ITAT in ITA No.27/HYD/2022 for the assessment year 2Ol7-18, uide ITIA No.39 of 2025, along with a petition seeking condonation of delay of 8OO days. The said delay condonation petition was dismissed, and consequently, the appeal was rejected by this Court by order dated 30.1O.2025. L7 . The present writ petition was filed prior to the hling of the said appeal and the writ petitioner has not availed the efficacious and effective remedy of appeal under Section 260-A of the Act, and instead has filed the instant Writ Petition under Article 226 of the Constitution of India, whrict. pima facte arnounts to surpassing I 10 the remedy under Section 260-A of the Act, which under normal circumstances is not permissible

18. The Honble Apex Court tn Chhabil Dass Agaruc Is case (supra), has clearly held that a rvrit petition under Article 226 of the Constitution of India is not maintainable, when an effective and efficacious alternate remedy is available under the statute. The Court has observed that u,rit jurisdiction under Article 226 of the Constitution should be exercised only 1n exceptional circumstanc e s. namelg - "a) Where remedy available under the statute is not effective but only a mere formality with no substantive b) c) d) e) relief; Where statutory authorities have not acted in accordance with the provisions of the enactment in question; Where the statutory authorities acted in defiance of the fundamental principles of judicial procedure; Where the statutory authority resorted to invoke the provisions which are repealed; Where the statutory authority passed orders in total violation of principles of natural justice."

19. As seen from the lactual matrix of the case, the petitioner has an efficacious statutory remedy of appeal under Section 260-A 1l of the Act, which enables this Court to examine substantial questions of law arising fronr the orders of the rearned ITAT amd to deal with the perversity of the orders passed by thc lorver appellate authorities, a,d this Court in exercise of jurisdiction und.er Article 226 of the Constitution of India, cannot function as a Court of Appeals against the decisron of a Tribuna.l/ITAT and re_appreciare the facts or legality of the orders of the Tribunal/I,IAT.

20. Thus, the contention of Sri N.praveen Reddy, learned Senior Standing Counsel, that the powers urrder Sectio n 26O_Acannot be obliterated by filing a writ petition under Articre 226 of the Constitution of htdia, appears to be germane and well-founded.

21. .ft is also relevant to note that the writ petitioner, instead of pursuing the statutory remedy in time, has chosen to invoke the \ extraordinary writ jurisdiction of this Court, to overcome the limitation and had the writ petitioner filed the appeal within the stipulated time, the same would have been considered on merits, as the remedy of appeal is comprehensive to deal with ali relevant questions of law. The conduct adopted by the writ petitioner for 72 conven l ence to gain advantage, is not acceptable and deserves to be deprecated

22. In vie,"r' of the above findings, we are of the considered view that the present Writ Petition is devoid of any merits and not maintainable, more particularly in view of the availability of a statutory appeal under Section 260-4 of the Act and more so it does not fa-ll within the exceptions carved out by the Hontrle Apex Court in Chhabtl Dass Agarucl's case (supra). Thus, the Writ Petition fails and is liable to be dismissed.

23. Accordinglv, the present Writ petition is dismissed. No order as to costs 'As a sequel thereto, miscellarreous petitions pending, if any, shall stand dismissed S AH ED ABDULLA KHAN ISTANT REGISTRAR /_ //TRUE COPY// SECTION OFFICER To,

1. One CC to SR 2. One CC to SRI [oPUCt 3. One CC to SRl. c. r wo CD Copies l. P. SOMA SHEKAR REDDY, Advocate [OPUC] N. BHUJANGA RAO, Deputy Solicitor General of lndia N PRAyEEN REDDY,SENIOR SC IOPUC] 8M BS Yv HIGH COURT DATED:01 11212025 ORDER I HE..t SIA a-',o 2 I JAN 2026 WP.No.21770 of 2024 t n j, a t DISMISSING THE WRIT PETITION WITHOUT COSTS ."t<el 6 Sa,,,