Nuziveedu Seeds Ltd. Vs Chief Commissioner of Income Tax (Telangana High Court)
The appeals before the High Court arose from orders of the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, relating to assessment years 2012–13 and 2013–14. Both appeals involved the same assessee and common issues, and were therefore heard together and decided through a common judgment.
The assessee, a public limited company engaged in the research, production, and sale of hybrid and open-pollinated seeds, filed returns declaring income under normal provisions and book profits under Section 115JB for both assessment years. The Assessing Authority passed assessment orders making substantial additions under Section 10(1) and Section 14A, significantly increasing the total income.
On appeal, the Commissioner of Income Tax (Appeals) partly allowed the assessee’s claims by deleting disallowances under Section 10(1), but upheld those under Section 14A. Both the assessee and the Revenue challenged this decision before the ITAT. The ITAT, by a common order dated 31.05.2022, remanded the matters to the Assessing Officer for reconsideration, directing examination of whether the assessee’s business was agricultural in nature and recomputation of disallowances accordingly.
During the pendency of the appeals before the ITAT, a search operation was conducted, leading to alleged discovery of incriminating material. Based on this, proceedings under Section 153A were initiated, which were separately challenged by the assessee in a writ petition, where interim stay was granted. Despite this, the Revenue sought to introduce the material discovered during the search as additional evidence before the ITAT. The assessee objected to this move.
