Supreme Court Directs ITAT to Independently Decide Delay Condonation — Paradise Food Court Private Limited Vs DCIT

Case Overview

Particulars Details
Case Name Paradise Food Court Private Limited Vs DCIT
Court Supreme Court of India
Petition Number Petition(s) for Special Leave to Appeal (C) No(s). 29096/2026
Date of Order 01/09/2026
Assessment Year 2018-19
Relevant Provisions Section 143(1), Section 143(2), Section 143(3), Section 253 of the Income Tax Act, 1961

Background of the Dispute

The matter arose from an intimation dated 11.11.2019 issued to Paradise Food Court Private Limited under Section 143(1) of the Income Tax Act, 1961 for Assessment Year 2018-19. The assessee contested the validity of this intimation on the ground that, by the time it was issued, the Income Tax Department had already set the wheel of regular scrutiny assessment in motion.

Specifically, the assessee pointed out that a notice under Section 143(2) had been issued on 23.09.2019 — that is, prior to the intimation — and that the assessee had duly responded to that notice on 08.10.2019. A regular assessment order under Section 143(3) was subsequently passed on 31.03.2021, which accepted the returns filed by the assessee.

The assessee's primary contention before the High Court was rooted in the principle of merger and jurisdiction:

  • Once a notice under Section 143(2) is issued and scrutiny proceedings are formally initiated, the Section 143(1) intimation proceedings either merge into the scrutiny proceedings or cease to have independent existence.
  • The issuance of an intimation under Section 143(1) after scrutiny proceedings had already commenced was therefore without jurisdiction and legally unsustainable.
  • The assessee relied on the following precedents to support this position:

Vodafone Idea Limited (earlier known as Vodafone Mobile Services Limited) vs. Assistant Commissioner of Income Tax, Circle 26(2) and Another, (2020) 19 Supreme Court Cases 12 (Supreme Court) — cited in support of the challenge to continuation of Section 143(1) proceedings once regular assessment proceedings had begun.

Tamil Nadu Magnesite Ltd. vs. The Commissioner of Income-Tax and Another, 2010 SCC OnLine Mad 4450 (Madras High Court) — cited concerning the legal effect of regular assessment proceedings on an intimation issued under Section 143(1).

The Department's Position

The Income Tax Department opposed the writ petition on two principal grounds: