REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8900 OF 2012 Commissioner of Income Tax, Delhi-1 ..Appellant(s) Versus M/s Container Corporation of India Ltd. ..Respondent(s) WITH CIVIL APPEAL No. 8901 of 2012 CIVIL APPEAL No. 4409 of 2014 CIVIL APPEAL No. 4983 of 2015 CIVIL APPEAL No. 8546 of 2015 CIVIL APPEAL No. 66 of 2016 CIVIL APPEAL No. 6407 of 2016 CIVIL APPEAL No. 6411 of 2016 CIVIL APPEAL No. 8034 of 2016 CIVIL APPEAL No. 6982 of 2016 CIVIL APPEAL No. 6635 of 2016 CIVIL APPEAL No. 9651 of 2016 CIVIL APPEAL No. 7211 of 2016 CIVIL APPEAL No. 7210 of 2016 CIVIL APPEAL No. 7209 of 2016 CIVIL APPEAL No. 8033 of 2016 CIVIL APPEAL No. 8032 of 2016 CIVIL APPEAL No. 10336 of 2016 Signature Not Verified CIVIL APPEAL NO. 4487 OF 2018 Digitally signed by ASHA SUNDRIYAL Date: 2018.05.01 (Arising out of Special Leave Petition (C) No. 24512 OF 2016) 17:52:46 IST Reason: CIVIL APPEAL No. 8755 of 2016 CIVIL APPEAL No. 9158 of 2016 1 CIVIL APPEAL No. 9157 of 2016 CIVIL APPEAL No. 8352 of 2016 CIVIL APPEAL No. 9159 of 2016 CIVIL APPEAL No. 10307 of 2016 CIVIL APPEAL No. 9744 of 2016 CIVIL APPEAL No. 9743 of 2016 CIVIL APPEAL No. 10308 of 2016 CIVIL APPEAL NO. 4543 OF 2018 (Arising out of Special Leave Petition (C) No. 30630 OF 2016) CIVIL APPEAL No. 10662 of 2016 CIVIL APPEAL No. 11709 of 2016 CIVIL APPEAL (C) NO. 4484 OF 2018 (Arising out of Special Leave Petition (C) No.1106 OF 2018 @ SLP(C)... (CC) No. 3354 OF 2017) CIVIL APPEAL No. 1441 of 2017 CIVIL APPEAL No. 4458 of 2017 CIVIL APPEAL NOs. 4493-4494 OF 2018 (Arising out of Special Leave Petition (C) Nos. 17056-17057 OF 2017) CIVIL APPEAL No. 4459 of 2017 CIVIL APPEAL No. 5571 of 2017 CIVIL APPEAL No. 5573 of 2017 CIVIL APPEAL No. 6800 of 2017 CIVIL APPEAL No. 11075 of 2017 CIVIL APPEAL NO. 4499 OF 2018 (Arising out of Special Leave Petition (C) No. 18849 OF 2017) CIVIL APPEAL No. 9364 of 2017 CIVIL APPEAL No. 9487 of 2017 CIVIL APPEAL No. 9277 of 2017 CIVIL APPEAL No. 10236 of 2017 2 CIVIL APPEAL No. 14900 of 2017 CIVIL APPEAL No. 16162 of 2017 CIVIL APPEAL No. 11202 of 2017 CIVIL APPEAL NO. 4548 OF 2018 (Arising out of Special Leave Petition (C) No. 23116 OF 2017) CIVIL APPEAL No. 15028 of 2017 CIVIL APPEAL No. 11117 of 2017 CIVIL APPEAL No. 15033 of 2017 CIVIL APPEAL No. 11160 of 2017 CIVIL APPEAL NO. 4547 OF 2018 (Arising out of Special Leave Petition (C) No. 23115 OF 2017) CIVIL APPEAL No. 15494 of 2017 CIVIL APPEAL No. 15497 of 2017 CIVIL APPEAL No. 17315 of 2017 CIVIL APPEAL NO. 4655 OF 2018 (Arising out of Special Leave Petition (C) No. 11535 OF 2018) (DIARY NO. (s) 26081 of 2017) CIVIL APPEAL No. 17534 of 2017 CIVIL APPEAL No. 17317 of 2017 CIVIL APPEAL No. 17318 of 2017 CIVIL APPEAL No. 18272 of 2017 CIVIL APPEAL No. 17986 of 2017 CIVIL APPEAL No. 18011 of 2017 CIVIL APPEAL No. 19491 of 2017 3 CIVIL APPEAL No. 19535 of 2017 CIVIL APPEAL No. 19935 of 2017 CIVIL APPEAL NO. 4645 OF 2018 (Arising out of Special Leave Petition (C) No. 32825 OF 2017) WITH CIVIL APPEAL No. 20850 OF 2017 CIVIL APPEAL No. 20851 of 2017 JUDGMENT R.K.Agrawal, J. 1) Leave granted. 2) present appeal has been filed against judgment and order dated 11.05.2012 passed by High Court of Delhi in ITA Nos.1411 of 2009, ITA Nos. 967 and 968 of 2011 wherein Division Bench of High Court while allowing above appeals filed by respondent herein set aside order dated 27.02.2009 passed by Income Tax Appellate Tribunal (in short Tribunal ) holding that respondent herein is entitled to claim benefit of Section 80-IA of Income Tax Act,1961(in short IT Act ). 4 3) Brief facts: (a) M/s Container Corporation of India Ltd. (CONCOR)-the respondent herein is government Company and is engaged in business of handling and transportation of containerized cargo and is under direct administrative control of Ministry of Railways. Its operating activities are mainly carried out at its Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Port Side Container Terminals (PSCTs) spread all over country. (b) issue in present case pertains to assessment year 2003-04 to 2005-06. respondent herein filed returns on income for all these years and claimed deduction under various heads including deduction under Section 80-IA of IT Act. This issue is with regard to deduction claimed under Section 80-IA on profits earned from Inland Container Depots (ICDs) and on rolling stocks. claim for deduction on profits earned from ICDs and further deduction on account of rolling stocks has been rejected by Assessing Officer vide Assessment Order dated 28.02.2006. 5 (c) respondent herein, being aggrieved with aforesaid order, filed appeal being No. 325/05-06 to Commissioner of Income Tax (Appeals)-VI, New Delhi. Learned CIT (Appeals), vide order dated 29.05.2007, partly allowed appeal while rejecting deduction claimed under Section 80-IA of IT Act. Being aggrieved, respondent herein further preferred ITA Nos. 2851 & 3680/DEL./2007, 2753 & 4477/DEL/2007 before Tribunal. Tribunal, vide order dated 27.02.2009, partly allowed appeal and held that deduction under Section 80-IA can be claimed with regard to rolling stocks of company but not with regard to ICDs. (d) Being aggrieved by order dated 27.02.2009, respondent herein challenged same before High Court by filing three Income Tax Appeals being Nos. 967 of 2011, 1411 of 2009 and 968 of 2011. Division Bench of High Court, vide judgment and order dated 11.05.2012, allowed appeals and held that Respondent herein is entitled to claim deduction on income earned from ICDs for relevant period under consideration under Section 80-IA of 6 IT Act. Being aggrieved by judgment and order dated 11.05.2012, Revenue has preferred this appeal before this Court. 4) Heard learned senior counsel for parties and perused factual matrix of case. Points for consideration:- 5) only point for consideration before this Court is whether in facts and circumstances of case Inland Container Depots (ICDs) under control of Respondent, during relevant period, qualified for deduction under Section 80-IA(4) of IT Act or not. Rival contentions:- 6) Learned senior counsel appearing for appellant contended that High Court was not right in holding that Respondent is entitled to deduction under Section 80-IA of IT Act as activities undertaken by assessee cannot be said to fall within Explanation (d) of Section 80-IA(4) defining term infrastructure facility. 7) Learned senior counsel further contended that High Court was wrong in placing reliance on Notification dated 7 01.09.1998 issued by Central Board of Direct Taxes (CBDT) to hold that Respondent is allowed to claim deduction under Section 80-IA of IT Act as power of said Board was taken away by Finance Act, 2001 with effect from 01.04.2002. Learned senior counsel further contended that in view of aforesaid amendment, Notifications issued by CBDT with regard to treating ICDs as infrastructure facility were applicable only upto Assessment Year 2002-03. 8) Learned senior counsel finally contended that ICDs cannot be termed as ports or inland ports within meaning of Section 80-IA(4) so as to allow them to claim deduction under said Section and judgment rendered by High Court is erroneous in eyes of law and is liable to be set aside. 9) Per contra, learned senior counsel appearing for Respondent contended that High Court has rightly set aside judgment and order dated 27.02.2009 passed by Tribunal. Learned senior counsel further contended that once ICDs have been notified validly by CBDT, by virtue of 8 powers conferred upon them, fact that at later point of time power was taken away does not put end to validity or effect of notification and as per relevant Section as it stood at time when notification was issued, Respondent was eligible for deduction for period of 10 successive assessment years which covers Assessment Years 2003-04 to 2005-06 which are years under appeal. Learned senior counsel finally contended that judgment and order passed by High Court does not call for any interference. Discussion: 10) As whole point in dispute revolves around ICDs, it would be appropriate to have understanding about same. ICDs function for benefit of exporters and importers located in industrial centers which are situated at distance from sea ports. purpose of introducing them was to promote export and import in country as these depots acts as facilitator and reduce inconvenience to person who wishes to export or import but place of his business is situated in land locked area i.e., away from 9 sea. These depots reduce inconvenience in import and export in sense that it reduces bottlenecks that are arising out of handling and customs formalities that are required to be done at sea ports by allowing same to be done at these depots only that are situated near to them. term ICDs was inserted in 1983 under Section 2(12) of Customs Act, 1962 which defines customs port and by provisions of Section 7(1)(aa) of Customs Act,1962 power has been given to Central Board of Excise and Custom(CBEC) to notify which place alone to be considered as Inland Container Depots for unloading of imported goods and loading of export goods by Notification in official Gazette. 11) With purpose of boosting country s infrastructure and specially transport infrastructure, Finance Act, 1995 which came into effect from 01.04.1996 brought amendment to provisions of Section 80-IA of IT Act. Section 80-IA of IT Act talks about deduction in respect of profits and gains from industrial undertaking or enterprises engaged in infrastructure development etc. said 10 amendment for first time brought provision under which percentage of profits derived from operation of infrastructure facility was allowed deduction while computing income of assessee. ten years tax concession allowed to enterprises in accordance with provisions of Section subject to fulfillment of conditions given therein, which develops, maintains and operates any new infrastructure facility such as roads, highways, expressways, bridges, airports, ports and rail system or any other public facility of similar nature as notified. 12) relevant portion of Section 80IA (as it stood then) reads as under: Section 80-IA(4A):This section applies to:-- any enterprise carrying on business of developing, maintaining and operating any infrastructure facility which fulfills following conditions, viz., Section 80-IA(5) clause(ia): in case of enterprise referred to in sub-section (4A) hundred percent of profits and gains derived from such business for initial five assessment years and thereafter thirty per cent of such profits and gains. 11 13) term infrastructure facility had also been defined which at relevant time stood as follows:- Section 80-IA(12)(ca): Infrastructure facility means:- road, highway, bridge, airport, port or rail system or any other public facility of similar nature as may be notified by Board in this behalf in Official Gazette; said provision gives power to Board to notify certain other enterprises which can avail benefit of Section 80-IA of IT Act, which do not fall within any of specified categories but carries out activities of similar nature. 14) Further, Central Board of Direct Taxes (CBDT), in exercise of its power under Section 80-IA(12)(ca), vide Notification No.S.O.744(E) dated 01.09.1998 notified ICDs and CFSs as infrastructure facility. 15) In addition to above, Finance Act, 1998, which came into effect on 01.04.1999, made change in definition of Infrastructure facility as is relevant to present case. words Inland water ways and inland ports were added in definition of infrastructure facility. Now, definition reads as under: 12 Infrastructure Facility means road, bridge, airport, port, inland waterways and inland ports, rail system by any other public facility of similar nature as may be notified by Board in this behalf in official Gazette. 16) noticeable change was further brought by Finance Act, 2001, which came into effect from 01.04.2002, in terms that power of Board to extend benefit of said provisions to any infrastructure facility of similar nature by issuing Notification was taken away. new explanation to Section 80-IA(4) of IT Act as is substituted by Finance Act, 2001 reads as under: For purpose of this clause infrastructure facility means- (a) road including toll road, bridge or rail system; (b) highway project including housing or other activities being integral part of highway project; (c) water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste management system; (d) port, airport, inland waterways or inland port; 17) It was contended on behalf of appellant that High Court erred in relying on Notification issued by CBDT to hold that enterprises holding ICDs are allowed to claim deductions under Section 80-IA of IT Act. As said power of Board was specifically taken away by amendment made by Finance Act, 2001, in light of said 13 amendment, Notifications which were issued by CBDT would cease to operate after Assessment Year 2002-03. 18) argument put forward by learned senior counsel for appellant does not have much force as said amendment is silent with regard to any effect it would have upon Notifications issued earlier by Board in due exercise of its power. Had it been intention of legislature that Notifications issued by Board earlier are of no effect after 2002-03, it would have had found place in said amendment. In absence of same, we are unable to concur with learned senior counsel that Notifications which were issued in legitimate exercise of power conferred on Board would cease to have effect after Assessment Year 2002-03. 19) Learned senior counsel for appellant contended that High Court committed grave error in holding ICDs as Inland Ports. It was further contended that ICDs are never understood to fall in category of Inland Port under scheme of IT Act. argument in support of this contention is that if word Inland Port , as used in 14 Explanation attached to Section 80-IA(4) of IT Act defining infrastructure facility includes ICDs, there would have been no need for CBDT to separately exercise its power given under said Section, as it stood then, to notify it as infrastructure facility. However, argument does not hold much weight behind it as Notification which was issued by CBDT came into effect on 01.09.1998 i.e., time when term Inland Port was not in itself inserted in provisions of Explanation attached to Section 80-IA(4) of IT Act defining term infrastructure facility . It was inserted through Finance Act, 1998 which came into effect from 01.04.1999. So there seems to be no conflict within Notification issued by Board and fact that ICDs are Inland Ports or not. 20) Moreover, we find that Respondent has been held entitled for benefit of Section 80IA of IT Act much before Finance Act, 2001 which came into force on 01.04.2002 and exemption for period of 10 years cannot be curtailed or denied by any subsequent amendment regarding eligibility conditions under period is modified 15 or specific provision is made that benefit from 01.04.2002 onwards shall only be claimed by existing eligible units if they fulfill new conditions. 21) Moving further to issue whether ICDs can be termed as Inland Ports so as to entitle deduction under Section 80-IA of IT Act. term port, in commercial terms, is place where vessels are in habit of loading and unloading goods. term Port as is used in Explanation attached to Section 80-IA(4) seems to have maritime connotation perhaps that is reason why word airport is found separately in Explanation. Considering nature of work that is performed at ICDs, they cannot be termed as Ports. However, taking into consideration fact that part of activities that are carried out at ports such as custom clearance are also carried out at these ICDs, claim of respondent herein can be considered within term Inland port as is used in Explanation. It is significant to note that word Inland Container Depots was first introduced in definition of Customs Port as is given in Section 2(12) of 16 Customs Act, 1962, through amendment made by Finance Act, 1983 with effect from 13.05.1983. 22) term Inland Port has been defined nowhere. But Notification that has been issued by Central Board of Excise & Customs (CBEC) dated 24.04.2007 in terms holds that considering nature of work carried out at these ICDs they can be termed as Inland Ports. Further, communication dated 25.05.2009 issued on behalf of Ministry of Commerce and Industry confirming that ICDs are Inland Ports, fortifies claim of respondent herein. Though both Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within meaning of Section 80-IA of IT Act, appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that term Inland Ports is used differently under Section 80-IA of IT Act. All these facts taken together clear position beyond any doubt that ICDs are Inland Ports and subject to provisions of 17 Section and deduction can be claimed for income earned out of these Depots. However, actual computation is to be made in accordance with different Notifications issued by Customs department with regard to different ICDs located at different places. 23) In light of forgoing discussion, we are of view that judgment of High Court does not call for any interference and, hence, appeal is accordingly dismissed. All connected appeals are disposed of accordingly. parties to bear cost on their own. J. (R.K. AGRAWAL) J. (ABHAY MANOHAR SAPRE) NEW DELHI; APRIL 24, 2018. 18 Commissioner of Income-tax, Delhi-1 v. Container Corporation of India Ltd