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

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 2.4.2019 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE C.V.KARTHIKEYAN Tax Case Appeal Nos.318 of 2013 and 1138 of 2015 Commissioner of Income Tax,Coimbatore....Appellant in both Appeals Vs. M/s.Chettinad Lignite Transport Services Private Limited,43, Race Course Road,Coimbatore – 641 018.PAN: ...Respondent 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 21.11.2012 made inITA No.1767/Mds/2012 and 22.5.2015 made in ITA No.313/Mds/2015,against the order dated 20.07.2012 made in I.T.A.No.207/11-12 bythe Commissioner of Income Tax (Appeals)-I, Coimbatore and theorder dated 14.11.2014, made in I.T.A.No.386/13-14 by theCommissioner of Income Tax (Appeals)-I, Coimbatore respectivelyagainst the Assessment order dated 28.12.2011 by the AdditionalCommissioner of Income Tax Range-I, Coimbatore and assessmentorder dated 29.11.2013 by the Assistant Commissioner of IncomeTax, Company Circle-i(i) Coimbatore against PAN No.AABCC7357Gfor the Assessment Year 2009-2010 and 2011-12 respectively. COMMON JUDGMENT (Delivered by DR.VINEET KOTHARI,J.) The Revenue has filed these appeals under Section 260-A ofthe Income Tax Act, 1961, raising the following substantial https://hcservices.ecourts.gov.in/hcservices/ questions of law arising from the orders of the learned Tribunaldated 21.11.2012 and 22.5.2015 respectively, whereby thelearned Tribunal allowed the appeals for the Assessment Years2010-2011 and 2011-2012 and held that the Assessee is entitledto the benefit of deduction under 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 80 IA, 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 80 IA(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 “infrastructure 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 “infrastructure https://hcservices.ecourts.gov.in/hcservices/ facility” has been defined in the Explanation andthe same includes a toll road, a bridge or a railsystem, 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, theProviso intends to extend the benefit of the saiddeduction under Section 80IA of the Act even to atransferee or a contractor who is approved andrecognised by the concerned authority andundertakes the work of the said development ofinfrastructure facility or only operating ormaintaining the same. The Proviso to sub-section(4) stipulates that subject to the fulfillment ofconditions, the transferee will be entitled to thesaid benefit, as if the transfer in question hadnot taken place. It has been found by theAssessing Authority himself, in the present case,that the present Assessee M/s.Chettinad LigniteTransport Services Private Limited under anAgreement dated 16.04.2002, captioned as LigniteTransport System with M/s.ST-CMS Electric CompanyPrivate Limited, had undertaken the work ofdeveloping the said railway sidings and wasoperating and maintaining the same. The onlyground on which, the Assessing Authority denied thesaid benefit 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 Section80IA(4) of the Act and held that since the Assesseewas recognised as contractor for these railwaysidings, which undoubtedly fell under thedefinition of “infrastructure facility”, it wasentitled to the said benefit under Section 80IA ofthe Act. The grounds on which the AssessingAuthority denied the said benefit to the Asesseeignoring the effect of Provisos to Section 80IA(4),therefore, could not be sustained. The learnedTribunal, in our opinion, has rightly held that theProviso does not require that there should be adirect agreement between the transferee enterpriseand the specified authority for availing thebenefit under Section 80IA of the Act. There is nodispute before us that the Assessee was dulyrecognised as transferee or assignee of theprincipal contractor M/s.ST-CMS Company PrivateLimited and was duly so recognised by the Railways to operate and maintain the said railway sidings atVadalur and Uthangalmangalam Railway Stations. Thefindings 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. to operate and maintain the said railway sidings atVadalur and Uthangalmangalam Railway Stations. Thefindings 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 claimof the Assessee company, which was engaged in powergeneration, for deduction under Section 80IA of theAct was denied by the Revenue on the ground thatthe Assessee 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). Onthese facts, the Court held that the Assessee wasnot entitled to deduction under Section 80IA of theAct. We do not find any parity of facts of thesaid case with the facts available before us. Thepower generating companies are entitled todeduction under Section 80IA of the Act indifferent sub clauses viz., under Section 80IA(4)(iv) of the Act. Where there is no such Proviso, asis available in clause (i) of Section 80IA(4) ofthe Act, which deals with deduction to enterpriseinvolved in developing, operating and maintainingthe infrastructure facilities. Obviously, if theAssessee is getting only fees for the maintenanceof certain power generating plant, as was the casebefore the Co-ordinate Bench of this Court inCovanta case (supra), he may not be entitled tosuch deduction, but the fact situation before us isentirely different and, therefore, we do not findany support from the said case cited by the learnedcounsel for the Revenue. 11. We are, therefore, of the consideredopinion that there is no merit in these appealsfiled by the Revenue and the questions of lawframed above deserve to be answered in favour ofthe Asessee and against the Revenue. We hereby doso. The appeals preferred by the Revenue deserveto be dismissed and accordingly, the same aredismissed. 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) ssk. //True Copy// Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal, Madras "B" Bench, Chennai.2. The Commissioner of Income Tax(Appeals)-I, Coimbatore.3. The Assistant Commissioner of Income-tax, Company Circle-1(I), Coimbatore.4. The Additional Commissioner of Income Tax, Range-I, Coimbatore.Copy To: The Section Officer, V.R.Section, High Court, Madras. +1 cc to M/s.T.R.Senthil Kumar, Advocate, Sr.No. 32362+1 cc to M/s.Subbaraya Aiyar padmanabhan, Sr.No.32369 GJ-II(CO)CSL/28.05.2019 T.C.(A) Nos.318/2013 & 1138/2015 https://hcservices.ecourts.gov.in/hcservices/