Assessment Reopening Beyond Four Years Is Impermissible Absent Failure to Disclose Material Facts Truly and Fully.

The Petitioner, an Indian company, operates a container terminal at Chennai Port under a license agreement

For Assessment Year (A.Y.) 2014-15, the Petitioner claimed a deduction under Section 80-IA of the Income Tax Act, which was allowed after scrutiny in a 2016 Assessment Order

On March 26, 2021—beyond four years from the end of the relevant A.Y.—the Revenue issued a notice under Section 148 to reopen assessment

The Revenue alleged that: (i) the Petitioner (the "enterprise") is owned by a Mauritian parent company, violating the "registered in India" condition of Section 80-IA(4)(i)(a)

(ii) the Petitioner merely operated an existing facility rather than developing a new one

The Petitioner challenged the reopening via Writ Petition

1. Whether the Revenue’s equating of the Petitioner company with the "enterprise" was legally valid under Section 80-IA(4)

2. Whether the initiation of reassessment proceedings after the expiry of four years was barred by the first proviso to Section 147 due to lack of failure by the assessee to disclose material facts

Section 80-IA of the Income Tax Act, 1961, which provides deductions for "enterprises" carrying on eligible infrastructure business, provided the enterprise is owned by a company registered in India

First proviso to Section 147 (as it stood then), which prohibits reopening an assessment after four years unless the assessee failed to "disclose fully and truly all material facts necessary for his assessment"

Literal interpretation of "enterprise" as a project or undertaking rather than the corporate entity itself

The Court found the Revenue's reasoning factually and legally flawed. First, it held that the "enterprise" is the specific port undertaking, which is indeed owned by the Petitioner, a company registered in India; the identity of the Petitioner's shareholders (Mauritian/Dubai entities) is irrelevant to this condition

Second, regarding the "new facility" claim, the Court noted the Revenue ignored the Petitioner's substantial investment of ₹35,210 lakhs in cranes and equipment

Critically, the Court observed that all relevant facts—shareholding patterns, the license agreement, and the nature of operations—were explicitly disclosed in the original return, Annual Report, and Audit Reports

Therefore, since the reopening occurred after four years, the Revenue failed to prove any "non-disclosure" of material facts, rendering the notice a mere "change of opinion"

The Court allowed the Writ Petition and quashed the impugned notice dated March 26, 2021, the order rejecting objections, and the draft assessment order. Rule made absolute.