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Commissioner of Income Tax, Delhi-I v. M/s. Container Corporation of India Ltd.

Civil Appeal · 2018 INSC 400Decided 24 Apr 2018
Civil Appeal No. 8900 of 2012
Justice R.K. Agrawal · Justice Abhay Manohar Sapre

Background

Container Corporation of India (CONCOR), a government company running Inland Container Depots (ICDs) and Container Freight Stations, claimed a tax deduction under Section 80-IA of the Income Tax Act for profits earned from its ICDs for assessment years 2003-04 to 2005-06. The Assessing Officer and the Income Tax Appellate Tribunal denied the deduction for ICD profits, but the Delhi High Court reversed this and allowed the deduction. The Revenue (Income Tax Department) appealed to the Supreme Court, along with roughly 50 connected appeals raising the identical question.

Decision Breakdown

The core question was whether ICDs qualify as an "infrastructure facility" (specifically, an "inland port") entitled to the Section 80-IA tax deduction. The Court held that although ICDs are not literally "ports" in the maritime sense, the nature of work performed there, customs clearance and cargo handling akin to port operations, justified treating them as "inland ports" within the meaning of the Explanation to Section 80-IA(4). The Court also rejected the Revenue's argument that a 1998 CBDT notification recognising ICDs as infrastructure facilities lost effect after the CBDT's notifying power was withdrawn in 2001, holding that the withdrawal of power did not retrospectively undo notifications validly issued earlier. The Delhi High Court's judgment was upheld and the Revenue's appeal, along with all connected appeals, was dismissed.

Lesson Learnt

A tax benefit validly granted under a government notification continues to apply for its full statutory period even if the government's power to issue such notifications is later withdrawn by amendment, unless the amending law expressly says otherwise.

Official source (sci.gov.in)View Judgment (PDF)

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