TaxTMI 
TaxTMI 
2026 (7) TMI 899
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....mited, India, Meherji Cashinath Limited, Mauritius and Chettinad Logistics Pvt. Limited, India. This was because the joint bid submitted by the said four companies for proposal to develop and maintain the Chennai Container Terminal had been found to be successful by the Ministry of Surface Transport in the Government of India on behalf of the Chennai Port Trust. The Petitioner received a Certificate for commencement of business, as per the Companies Act, 1956, on 13.11.2000. Further, from the Financial Year 2008-09, the Petitioner is a 100% subsidiary of P&O Ports (Chennai) Ltd., Mauritius which in turn now is entirely held by D. P. World Ltd., Dubai. 4. Pursuant thereto, on 09.08.2001, a License Agreement was executed by the Board of Trustees of the Chennai Port Trust in favour of the Petitioner for the development and management of the Chennai Container Terminal. The said agreement granted it exclusive license for designing, re-designing, engineering, financing, constructing, equipping, operating and maintaining the said project facilities. The license had been granted for a period of 30 years. Since the said port was earlier operated and maintained by the Chennai Port Trust, ....
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....llowed in the Assessment Order dated 27.12.2016 passed under Section 143(3) of the Act, reassessment proceedings had been initiated by issue of notice dated 26.03.2021 under Section 148 of the Act to deny the same. The belief as formed by Respondent No. 1 in support of escapement of income for the Assessment Year 2014-15 and the year under consideration remains the same. This Court, by its Judgment and Order dated 16.06.2026, allowing the Writ Petition filed by the Petitioner company, has quashed and set aside the said reassessment proceedings. In this regard, it has inter alia held that the belief with respect to escapement of income as formed by the Respondent No. 1 was not justified in law as well as the proceedings were barred by limitation in view of proviso below Section 147 of the Act. The latter finding would not be relevant for the year under consideration. 9. For the year under consideration i.e., the previous year relevant to Assessment Year 2016-17, the Petitioner's Profit and Loss account reflected profit before tax of Rs. 43,17,20,000. In Note 1 to the financial statements forming part of its Annual Report, the Petitioner has inter alia brought out that it is e....
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....VI-A should be allowed. In response thereto, the Petitioner, by its letter dated 29.10.2018, provided a copy of its audited financial statements including the tax audit report, the audit report obtained for the purposes of transfer pricing and such audit report obtained in accordance with Section 80-IA(7) of the Act. Further, by its letter dated 03.12.2018 by way of a note on business activity, it explained that it is engaged in the business of managing, developing and maintaining the container terminal at Bharathi Dock at Chennai Port Trust pursuant to the License Agreement dated 09.08.2001. That it had installed various cranes at Wharf and at Yard for the purposes of carrying out the port operation activities. Certain aspects with respect to the License Agreement were also explained. Further, by its letter dated 06.12.2018, a detailed explanation was provided with respect to allowability and computation of deduction under Section 80-IA of the Act. 15. Pursuant thereto, Respondent No. 1 passed an Assessment Order dated 07.12.2018 accepting the Petitioner's business to be that of managing, developing and maintaining the container terminal at the Bharathi Dock at Chennai Port and....
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....nted a change of opinion which would not be permissible in law. It was also urged that approval has been given by Respondent No. 2 in the present case in a mechanical manner and without application of mind as the proposal for reopening the assessment was drawn up by Respondent No. 1 on 25.03.2021 and the approval has also been granted by Respondent No. 2 on the same date. 20. The Petitioner's objections were rejected by Respondent No. 1 by his impugned order dated 17.02.2022. 21. Thereafter, the Petitioner was served with a notice dated 18.02.2022 issued under Section 143(2) of the Act and another dated 08.03.2022 issued under Section 142(1) of the Act requiring it to make its submissions on various aspects including grant of deduction under Section 80-IA of the Act. 22. In response to the same, by its letter dated 14.03.2022, the Petitioner requested for time. 23. On 16.03.2022, without referring to the Petitioner's application for time, Respondent No.4 issued the impugned Show Cause Notice annexing a Draft Assessment Order seeking to deny its claim for deduction under Section 80-IA of the Act. It is in these circumstances that the Petitioner has filed the pres....
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.... respect to escapement of income has been formed by Respondent No. 1 in the present case only based on a Revenue Audit objection. A comparison of the audit objections as reproduced in the said affidavit and the belief as formed by Respondent No. 1 with respect to escapement of income, shows that there is no distinction between the two and the latter is a reproduction of the earlier. In this regard, he also relied upon the judgment dated 05.04.2022 of this Court in the case of Voltas Ltd. v. ACIT & Ors. in Writ Petition No. 1180 of 2022, wherein, initiation of reassessment proceedings based on an audit objection has been held to be invalid. For all the aforesaid reasons, the learned counsel submitted that the notice issued under Section 148 of the Act is invalid and required to be quashed. 28. On the other hand, Ms. Samiksha Kanani, the learned Advocate for the Respondents relied upon the Affidavit in reply dated 25.06.2022 filed by Respondent No. 1 on behalf of the all the Respondents. She submitted that the enterprise had to be owned by a company registered in India and that the audit objection revealed that the Petitioner being the enterprise is owned by a company by the name ....
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....ioner has not fulfilled the conditions in sub-clauses (a) and (b) of clause (i) of subsection (4) of Section 80-IA is concerned, it has been held by this Court in its Judgment and Order dated 16.06.2026, in the Petitioner's own case in Writ Petition No. 2959 of 2022, that reference to both the aforesaid aspects as suggesting escapement of income are not valid. In this regard, this Court has observed in paragraphs 34 to 42 as under :- "34. The first reason given for re-opening the assessment is that the assessee (Petitioner) is an enterprise and that it it is owned by a company named P&O (Chennai) Ltd., Mauritius, which is not a company registered in India, and, hence, the Petitioner has committed a breach of Section 80-IA(4) and is not entitled to a deduction under Section 80-IA. 35. In our view, this reason given by Respondent No. 2 is incorrect. Respondent No. 2 has made the mistake of equating the Petitioner with an enterprise. 36. The Concise Oxford English Dictionary (Twelfth Edition) defines enterprise as "enterprise - n. 1 a project or undertaking, especially a bold one. bold resourcefulness. 2 a business or company". 37. Thus, the pri....
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....e reasons recorded before reopening the assessment shows that the belief as formed by Respondent No. 1 with respect to escapement of income is based on the assessment record as available at the time of passing of the original Assessment Order. There is no new tangible material which has come to the notice of Respondent No. 1 after the passing of the same. The relevant facts with respect to the shares of the Petitioner company being held by P & O Ports (Chennai) Ltd., being a resident of Mauritius, which was a wholly owned subsidiary of D. P. World Ltd., being a resident of Dubai, UAE and that, Bharathi Dock was an existing container terminal which had been leased out by the Chennai Port Trust to the Petitioner, formed part of the audited financial statements, the tax audit report, the audit report in Form 3CEB as required under Section 92E of the Act dealing with transfer pricing and the audit report in Form 10CCB obtained under Section 80-IA (7) of the Act. Further, in the course of the assessment proceedings, Respondent No. 1 had applied his mind to the aspect relating to grant of lease of the Bharathi Dock by the Chennai Port Trust to the Petitioner and its claim for deduction i....