WP/28440/2009 of M/S. MARGADARSI CHIT FUND LTD.,, HYD. Vs THE ADDL. COMMR. OF I.T. on 2 December 2025

[34891

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDERABAD

(Special Original Jurisdiction)

TUESDAY, THE SECOND DAY OF DECEMBER

TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE P.SAM KOSHY

AND

THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO

WRIT PETITION NO: 28440 OF 2009

Between:

M/s. lVlargadarsi Chlt Fund Limited, Rep. by its IVlanag]ng Drrector, Smt.Ch.Sa"ilaja, W/o.Ch.Kiran 5-10-195, Corporate office, Opp: Police Control Room Hyderabad.

...PETITIONER

AND

The Additional Commissioner of lncome Tax, Range 16' Ayakar Bhavan, Basheerbagh, Hyderabad .RESPONDENTS

Petition under Article 226 of lhe Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a order or direction or writ more in the nature of writ of certiorari calling for the record comprised in the impugned notice under Section 274 Rlw.

271 of lhe l.T. Act, '1961 dated 14.12 2009 issued by the Respondent and quash the same

l.A. NO: 1 OF 2009(WPMP. NO: 37008 OF 2009)

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 grant an order of interim stay of all further proceedings in pursuance of the impugned notice under section 274 PUw. 271 0f the l.T. Act, 1961 dated 14.12.2009 issued by the Respondent pending disposal of the above writ petition and thus render justice.

..,:.e+

Counsel for the Petitioner: SRI KAILASH NATH P.S.S, REPrr:SENTING

SRI T. BALA MOHAN REDDY

Counsel for the Respondent: SRI K. SUDHAKAR REDDY

(Sr SC FoR INCoME TAx)

The Court made the following: ORDER

**7

IN THE HIGH COURT FOR THE STATE OF TELANGANA

AT HYDBRABAD

THE, HONOURABI-E SRI.IUSTTCE P.SAM KOSHY

AND

THE HONOURABLE SRI JUSTICE

SUDD,,\LA CHALAPATHI RAO

W.P.No. 28440 OF 2009

02.12.2025

Between

M/s Margadarsi Clhit liind Limited,

Rep. by its Managing Dilcctor,

Smt.Ch.Shaitaja,

Hyderabad.

. . . Petitioner

AND

l'he Additiona[ Contmissioner ol Incorne Tax, Rar-rge 16, Ayakar Bhavan, Basheerbagh, I Iyderabad.

. . .Respondent

ORDER (pcr Hon hlc Sri lustice l' Sum Koshy)

tleard Mr. Kailash Nath I'}.S.S, leamed counsel representing Mr. T.Bala Mohan Reddy, leamed counsel for the petitioner and Mr. K.Sudhakar Reddy, learned Senior Standing Counsel for the lncome Tax Department for the respondent' Perused the record'

a

l

2.

The present is a writ petition assailing the slr< w cause notice issued by the departnrent dated 14.12.1009 undcr Si:tiott 271(l){c)

of the Incorne 'l-ax Act, 196 I seeking explanation e r to u'hy penalty should not be ir-nposcd pursuant to the assessrn: rt order clated 14.12.2009 so far as the asscsstnent ycar 2007-20()tr s coltcerned

3.

The asscsstnent order rvas alrcady undcr (lallengc bctbre this Court in W.t'].No.2844 I of 2009 rvhich stot,r parll)' allowed vide order lrassecl today i.e.,02.12.2025. The ortlt: ol assessment so far as the chit contributiorr to thc subscribers ':ing treated as interest and dividend being set asidc: holding thut i rvould not be treated as interest and dividcnd in terurs of thc .ir dgment of the Delhi High Coun in the case o1'COMMISSIONt II OF INCO|vIE

TAX VS. SAHTB CHITS (DELHI) (P) LTD..r t td also tu,o of the writ petitions decided by this High Court in \\' P.No.26553 ol 2005 decided on 29.01.2024 and W.l'.No. I 562 ol' -l t08 dccided on 26.06.2025, the order of the Assessing Officer to tlri t extent stands set aside.

'lTA No.44 OF 2008 DATIID 14.01 .2009

of High Court of Delhi at New l)elhi

ry

To,

TJ

LS

4.

In view ol W.P.No.28441 ol 2009 being partly allowed and the maior porlion ol the order gctting setting aside, we do not find any good ground in sustaining thc show cause notice in the given facts any lurther. Nonetheless, tlie right ol the Dcpartrnent would stands leservcd to initiate appropriate proceedings so f-ar as the other issues arc concerncd. if at all ifsuch a situation stilI survives

5.

The present writ petition, accordingly, stands disposed of rvith the aforesaid liberrl'. I'herc shall be no order as to costs Consequently, misccllaneous petitions pending, if any, shall stand closed.

SDi.M. JAWAHAR REDDY

A SISTANT REGISTR

,TRUE COPY//

ECTION OFFICER

1. THE ADDL. COMN/IR. OF l.T , Range 16, Ayakar Bh , Basheerbagh, Hyderabad

2. One CC to Sri T. Bala [r,4ohan Reddy, Advocate [OPUC]

3. One CC to Sri K. Sudhakar Reddy (Sr SC for lncome Tax) [OPUC]

4. Two CD CoPies

\4*

HIGH COUR.T

DATED:0211212025