Commissioner Of Income Tax, Coimbatore. Appellant In Both Appeals v. M/S.chettinad Lignite Transport Services Private Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Tax Case Appeal Nos.559 & 560 of 2013 Commissioner of Income Tax,Coimbatore.Appellant in both AppealsVs. M/s.Chettinad Lignite Transport ServicesPrivate Limited,43, Race Course Road,Coimbatore - 641 018.PAN: AABCC7357GRespondent in both Appeals Tax Case Appeals filed under Section 260A of the Income TaxAct, 1961 against the orders of the Income Tax AppellateTribunal, Madras 'B' Bench, Chennai, dated 18.11.2011 made inITA Nos.1312/Mds/2011 and ITA No.1313/Mds/2011 against theAppellate order of the Commissioner of Income -Tax(Appeals)-I,Coimbatore dated 25.04.2011 and made in Appeal Nos.211/2010-11 &210/2010-11 for the Assessment year 2007-08 & 2008-09; andagainst the Assessment order of the Assistant Commissioner ofIncome Tax, Company Circle I(1), Coimbatore, dated 24/12/2010and made in PAN/GIR No. for te Assessment year 2007-08& 2008-09. (Delivered by DR.VINEET KOTHARI,J.)The Revenue has filed these Appeals under Section 260-A ofthe Income Tax Act, 1961, raising the following substantialquestions of law arising from the orders of the learned Tribunaldated 18.11.2011, whereby the learned Tribunal allowed theAppeals for the Assessment Years 2007-2008 and 2008-2009 and https://hcservices.ecourts.gov.in/hcservices/ held that the Assessee is entitled to the benefit of deductionunder Section 80IA of the Act:-"i) Whether under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe assessee is eligible for deduction underSection 80IA, when the assessee is only a sub-contractor? ii) Whether under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe assessee is eligible for deduction underSection 80IA, without examining the effect ofexplanation inserted at the end of the Sectionby Finance Act 2007 with retrospective effectfrom 1.4.2000 which was also substituted byFinance (No.2) Act, 2009 with retrospectiveeffect from 1.4.2000? iii) Whether under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe assessee is eligible for deduction underSection 80IA, though the assessee did notfulfil the condition laid down in Section 80IA(4) of having a contract with anyGovernment/authority referred to in thatsection? iv) Whether under the facts andcircumstances of the case, the Income TaxAppellate Tribunal was right in holding thatthe assessee is eligible for deduction underSection 80IA, the assessee did not satisfyproviso to Section 80IA(4) inasmuch as there isno transfer of infrastructure facility?" 2. Learned counsels appearing for the parties brought toour notice that the controversy involved in the present Appealsis covered by the Judgment of this court dated 6.3.2019 in thecase of the same Assessee in T.C.A.Nos.741, 1266 of 2009 and 162of 2015 wherein this court has has held as under:- " 8. From a reading of the aforesaid Provisos toSection 80IA(4), it is clear that the Legislatureintended to extend the said benefit under Section80IA of the Act to an enterprise involved in (i)developing or; (ii) operating and maintaining or;(iii) developing, operating and maintaining anyinfrastructure facility. The term "infrastructurefacility" has been defined in the Explanation andthe same includes a toll road, a bridge or a rail https://hcservices.ecourts.gov.in/hcservices/ 2. Learned counsels appearing for the parties brought toour notice that the controversy involved in the present Appealsis covered by the Judgment of this court dated 6.3.2019 in thecase of the same Assessee in T.C.A.Nos.741, 1266 of 2009 and 162of 2015 wherein this court has has held as under:- " 8. From a reading of the aforesaid Provisos toSection 80IA(4), it is clear that the Legislatureintended to extend the said benefit under Section80IA of the Act to an enterprise involved in (i)developing or; (ii) operating and maintaining or;(iii) developing, operating and maintaining anyinfrastructure facility. The term "infrastructurefacility" has been defined in the Explanation andthe same includes a toll road, a bridge or a rail https://hcservices.ecourts.gov.in/hcservices/ system, a highway project, etc. These are,obviously, big infrastructure facilities for whichthe enterprise in question should enter into acontract with the Central Government or StateGovernment or Local Authority. However, the Provisointends to extend the benefit of the said deductionunder Section 80IA of the Act even to a transfereeor a contractor who is approved and recognised bythe concerned authority and undertakes the work ofthe said development of infrastructure facility oronly operating or maintaining the same. The Provisoto sub-section (4) stipulates that subject to thefulfillment of conditions, the transferee will beentitled to the said benefit, as if the transfer inquestion had not taken place. It has been found bythe Assessing Authority himself, in the presentcase, that the present Assessee Mis. ChettinadLignite Transport Services Private Limited under anAgreement dated 16.04.2002, captioned as LigniteTransport System with Mls.ST-CMS Electric CompanyPrivate Limited, had undertaken the work ofdeveloping the said railway sidings and wasoperating and maintaining the same. The only groundon which, the Assessing Authority denied the saidbenefit was that the Assessee himself did notenter into any such contract with the Railways orwith the Central Government. 9. The learned Tribunal, however, in ouropinion, rightly applied the Proviso to Section 80IA(4) of the Act and held that since the Assessee wasrecognised as contractor for these railway sidings,which undoubtedly fell under. the definition of"infrastructure facility", it was entitled to thesaid benefit under Section 80IA of the Act. Thegrounds on which the Assessing Authority denied thesaid benefit to the Asessee ignoring the effectof Provisos to Section 80IA(4), therefore, couldnot be sustained. The learned Tribunal, in ouropinion, has rightly held that the Proviso does notrequire that there should be a direct agreementbetween the transferee enterprise and the specifiedauthority for availing the benefit under Section80IA of the Act. There is no dispute before usthat the Assessee was duly recognised astransferee or assignee of the principalcontractor M/s.ST-CMS Company Private Limited andwas duly so recognised by the Railways to operateand maintain the said railway sidings at Vadalurand Uthangalmangalam Railway Stations. The findings of fact with regard to the said positionrecorded by the learned Tribunal are, therefore,unassailable and that clearly attracted the firstProviso to Section 80IA(4) of the Act. 10. The learned counsel for the Revenue reliedupon a decision of this Court in the case ofM/s.Covanta Samalpatti Operating Private Limited,Chennai-20 v. The Assistant Commissioner of IncomeTax, Company Circle I (3), Chennai-34, reported in(2018) 93 Taxmann 38. In the said case, the claim ofthe Assessee company, which was engaged_in powergeneration, for deduction under Section 80IA of theAct was denied by the Revenue on the ground that theAssessee Undertaking had not been set up forgeneration and distribution of power and that theAssessee was only a contractor for the maintenancework of power plant, which was owned by SamalpattiPower Corporation Private Limited (SPCL). On thesefacts, the Court held that the Assessee was notentitled to deduction under Section 80IA of the Act.We do not find any parity of facts of the said casewith the facts available before us. The powergenerating companies are entitled to deduction underSection 80IA of the Act in different sub clausesviz., under Section 80IA(4)(iv) of the Act. Wherethere is no such Proviso, as is available in clause(i) of Section 80IA(4) of the Act, which deals withdeduction to enterprise involved in developing,operating and maintaining the infrastructurefacilities. Obviously, if the Assessee is gettingonly fees for the maintenance of certain powergenerating plant, as was the case before the Co-ordinate Bench of this Court in Covanta case(supra), he may not be entitled to such deduction,but the fact situation before us is entirelydifferent and, therefore, we do not find any supportfrom the said case cited by the learned counsel forthe Revenue. 11. We are, therefore, of the consideredopinion that there is no merit in these appealsfiled by the Revenue and the questions of law framedabove deserve to be answered in favour of theAsessee and against the Revenue. We hereby do so.The appeals preferred by the Revenue deserve to bedismissed and accordingly, the same are dismissed.No costs." 3. The present Appeals deserve to be disposed of in thesame terms. Accordingly, they are dismissed. No order as tocosts. Sd/-Assistant Registrar(CS-VI)//True copy//Sub Assistant Registrarssk.To1. The Registrar, Income Tax Appellate Tribunal, Madras "B" Bench , Chennai.2. The Commissioner of Income Tax, Coimbatore.3. The Assistant Commissioner of Income-tax, Company Circle-1(I), Coimbatore.4. The Commissioner of Income Tax (Appeals)-I, Coimbatore+1cc to M/s.Subbaraya Aiyar, Advocate SR.No.32365T.C.(A) Nos.559 & 560 of 2013PA(CO)GMY(18/06/2019)