COMMON JUDGMENT

[Judgment of the Court was delivered by R. MAHADEVAN, J.]

The Commissioner of Income-tax, Chennai is the appellant herein. TCA No.405 of 2013 is directed against the order dated 23.08.2012 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai, relating to the assessment year 2006-07, whereas TCA Nos.267 to 269 of 2014 are directed against the order dated 07.09.2011 passed by the Income Tax Appellate Tribunal, 'A' Bench, Chennai for the assessment years 2003-2004, 2004-2005 and

2005-2006 respectively.

2.The aforesaid tax case appeals were admitted on the following substantial questions of law:

"1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is eligible for deduction, even if the claim is not made in its return of income? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in directing the Assessing Officer to allow deduction claimed by the assessee under Sections 11 and 12 of the Income Tax Act, even though the assessing officer had completed the assessment based on the return through which the assessee did not claim such deductions and did not examine whether the assessee had complied with all conditions necessary for such deduction."

TCA Nos.267 to 269 of 2014

1. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal was right in upholding the orders of CIT(A) in granting the benefit of sections 11 and 12 without the assessee satisfying the conditions for claiming the same?

2. Whether on the facts and in the circumstances of the case, the Income Tax Tribunal was right in holding that benefit of section 11 is to be granted to the assessee when no valid return had been filed?

3.The background facts of the appeals are as follows:

3.1. The assessee / Chennai Port Trust, is a statutory body created under the Major Port Trusts Act, 1963. Till 2002, the income of the assessee was not assessed to tax. They were brought to taxation for the first time in the assessment year 2002-2003 on account of insertion of explanation to sub-

section 20 of section 10 by the Finance Act, 2002.

3.2. For the assessment year 2003-2004, the assessee filed its return of income on 01.12.2003 disclosing a loss of Rs.19,50,71,678/-, which was processed under section 143 (1) of The Income Tax Act 1961 (in short, "the Act") and notice dated 28.06.2004 was issued under Section 148 of the Act, on receipt of which, the assessee filed its return of income on 18.02.2005 declaring a loss of Rs.46,36,69,119/-. Subsequently, the assessing officer passed the order of assessment on 17.03.2006, under section 143 (3) r/w section 147, determining the income of the assessee as Rs.36,70,98,060/-. Subsequently, vide orders dated 10.12.2007 and 28.12.2007, in compliance with the order dated 17.08.2007 passed by the Tribunal in ITA No.

2036/Mds/2006, the total loss was re-computed at Rs.39,91,67,662/-.

3.3. For the assessment year 2004-2005, the assessee filed its return of income on 01.11.2004 and revised return on 28.03.2006 declaring a loss of Rs.7,87,87,768/-. Upon considering the same, the assessing officer completed the assessment under section 143(3) on 29.12.2006 by disallowing certain expenditure. Challenging the assessment order, the assessee preferred an appeal before the CIT(A), which was partly allowed on 28.03.2008 by giving a relief to the extent of Rs.11,67,39,976/-, besides directing the assessing officer to allow the depreciation as per the amended provisions of section 43(6). 3.4. Thereafter, for the assessment years 2003-04 and 2004-05, the assessing officer issued notices under section 147 of the Act on 17.03.2008 purportedly to reduce the depreciation allowed in favour of the assessee in respect of certain fixed assets viz., capital dredging, dockwater, piers and jetties, container berth and parking yard area from the originally allowed rate of 25% to 10%. While so, the assessee was granted regis