Premier Solar Power Tech Private Limited Vs PCIT (Telangana High Court)
Summary: The Telangana High Court at Hyderabad, comprising Justice P. Sam Koshy and Justice Narsing Rao Nandikonda, allowed Writ Petition No.21429 of 2026 by order dated 20.07.2026. The Court set aside the order dated 27.03.2026 passed by the Principal Commissioner of Income Tax under Section 264 of the Income-tax Act, 1961 and remanded the petitioner’s application dated 03.04.2024 for fresh consideration on merits and in accordance with law. The Court did not itself grant the claimed reduction of income; the relief application was restored for consideration by the revisional authority.
The dispute arose from taxation of Rs.6,85,02,377/- in the hands of M/s. Premier Solar Power Tech Private Limited in two assessment years. The petitioner was engaged in Engineering, Procurement and Construction of solar power projects and had received a contract from NLC India Limited for setting up a 100 MW (AC) Grid Interactive Solar PV Power Project. The project was scheduled for completion by 23.04.2019 but was completed on 09.09.2019, with the contract providing for liquidated damages for delay.
During financial year 2019-20, the petitioner charged Rs.16,04,12,000/- towards liquidated damages in its Statement of Profit & Loss and claimed the amount as a deduction for assessment year 2020-21. Following settlement with NLC Limited, Rs.9,79,12,000/- was reversed during financial year 2020-21 and offered to tax for assessment year 2021-22. The amount reversed included Rs.6,85,02,377/-. The petitioner filed its original return for assessment year 2021-22 on 14.03.2022 and revised return on 15.03.2022, declaring total income of Rs.1,91,27,266/- including the credit of Rs.9,79,12,000/-.
