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2023 Supreme(Bom) 99
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
DHIRAJ SINGH THAKUR, KAMAL KHATA, JJ.
Saurashtra Infra and Power Pvt. Ltd. – Petitioner
Versus
Deputy Commissioner of Income Tax, Mumbai – Respondent
Writ Petition No. 1360 of 2022
Decided On : 09-01-2023
Advocate Appeared:
For the Petitioners: V. Sridharan, B.V. Jhaveri, Sriram, Bhargavi Rawal.
For the Respondents: Akhileshwar Sharma, Shilpa Goel.
Headnote:
Income Tax Act, 1961 – Section 148, 80-IA, 80-IA(4)(i), 36, 80-I A(4), 147 – Infrastructure facility – Telecommunication services – Benefit of deduction is allowable – Provides for the reopening of assessment proceedings – A taxpayer may find the reasons stated by an AO to assess taxable income invalid – Contains the list of deductions from income earned through the business or profession – Present petition is fled, inter-alia, challenging notice, , issued u/s. 148 of Income Tax Act, 1961, whereby reassessment proceedings are sought to be initiated against petitioner for assessment year – Held, Court had been pleased to entertain a Special Leave Petition against judgment in Continental Warehousing Corporation Ltd – However, even that objection loses its substratum in view of fact that SLP preferred by Revenue in case of Continental Warehousing Corporation Ltd. (Supra) has since been dismissed – For purposes of reference, this Court, in case of Continental Warehousing Corporation Ltd – Considering order passed by Tribunal which had held assessee in that case entitled to benefit under section 80-IA(4) of Act based upon earlier view expressed by a Special Bench of Tribunal as also Delhi High Court in Container Corporation of India Ltd – Special Bench had held that case of Container Freight Station was similarly situate as that of an Inland Container Depot (ICD) inasmuch as both carried out similar functions of warehousing, customs clearance and transport of goods from its location to sea-ports and vice-versa – This Court in Continental Warehousing Ltd upheld view of Tribunal - Petition allowed accordingly.
JUDGMENT :
DHIRAJ SINGH THAKUR, J.
1. The present petition is fled, inter-alia, challenging the notice, dated 26th March 2021, issued u/s. 148 of the Income Tax Act, 1961 (‘the Act’), whereby the reassessment proceedings are sought to be initiated against the petitioner for the assessment year 2015-16.
2. Briefly stated the material facts are as under:
(a) The petitioner is a company engaged in the business of infrastructure development and running a Container Freight Station. Return of income for the assessment year 2015-16 was fled on 30th September 2015 and declared book profit u/s. 115-JB of the Act of Rs. 8,72,54,012/-. The petitioner in its return claimed a deduction of Rs. 10,24,27,306/- u/s. 80-IA(4) of the Act. The case of the petitioner was selected for scrutiny for purposes of verification of claim as regards deduction under Chapter VI-A of the Act.
(b) A notice u/s. 143(2) of the Act dated 27th July 2016 was issued and subsequently a notice u/s. 142(1) dated 19th January 2017 was issued.
(c) Reply dated 3rd May 2017 is stated to have been fled along with acknowledgment of fling revised Form 10-CCB for A.Y. 2015-16 dated 27th April 2017 and un-audited accounts for infrastructure unit on which deduction u/s. 80-IA(4) was claimed. A reply dated 22nd May 2017 along with note on large deduction claimed under Chapter VI-A and documents explaining the basis for claiming deduction u/s. 80-IA(4) of the Act was also fled. Finally, the Assessing Officer (‘AO’) passed the assessment order dated 12th June 2017. However, disallowed the deduction u/s. 80-IA(4) of the Act to the extent of Rs. 4,17,247/- only.
3. A notice dated 26th March 2021 u/s. 148 of the Act was issued for reopening the assessment for the assessment year 2015-16. Return of income was fled by the petitioner on 3rd August 2021 in response to the notice u/s. 148 of the Act. Reasons were sought for reopening of the assessment. Reasons were finally provided vide letter dated 20th January 2022. The reasons recorded are reproduced hereunder:
“Reasons of opening:
............
2. The benefit of deduction is allowable to an assessee only for Eligible Business specified in section 80-IA viz. Infrastructure facility or Telecommunication services which are defined and thus services defined in section 80-IA is only to be treated as Eligible Business. Further, infrastructure facility is defined in two places in the Act, i.e., in Explanation under section 80-IA(4)(i) as well as in Explanation (d) to section 10(23F) and clause (d) of the Explanation of clause (viii) of sub-section (1) of section 36. In 80-IA, other public facility as notified by Board was deleted vide Finance Act, 2001 w.e.f. 1.4.2002.
Thus, Container Freight Station (CFS) is not an eligible infrastructural facility as provided in Explanation to Section 80-IA(4) of the Act. As per Boards clarification dated 6th January 2011, inland container depots and container freight stations are not ports located on any inland waterway, river or canal and therefore they cannot be classified as inland ports for the purposes of section 80-IA(4).
In the case, on perusal of the computation of income, it is seen that the assessee company has claimed deduction u/s. 80-IA of the Act of Rs. 10,20,10,059/- whereas it is seen that the assessee company is running a CFS and as noted above Container Freight Station (CFS) is not an eligible infrastructural facility as provided in Explanation to Section 80-IA(4) of the Act, the claim of deduction by the assessee on this account is not in order. This resulted in under-assessment of income by Rs. 10,20,10,059/- and the same has escaped assessment.........”
4. The reasons for reopening briefy stated was that the Container Freight Station (CFS) is not an eligible infrastructural facility as provided in Explanation to Section 80-IA(4) of the Act and that the claim of deduction of the assessee on this account was not in order which had resulted in under-assessment of income by Rs. 10,20,10,059/- and the sa
