Chapter XXC of the Income-tax Act

Court :
SC

Brief :
Appellants are the owners of property bearing No.B-68, Greater Kailash, Part-I, New Delhi and they let out the same at a monthly rental of Rs.2,50,000/- with effect from Ist June, 1991 for a period of nine years renewable for a further period of nine years. The appropriate authority of the Income-tax Department, respondent herein issued show cause notice to the appellant dated 4th December, 1995, inter alia, alleging that since the lease is for a period of nine years extendable for a further period of nine years, it was a lease for a period of more than 12 years and hence the provision of Chapter XXC of the Income-tax Act (hereinafter referred to as the “Act”) would be attracted and the lessor and the lessee were obliged to submit Form 37-1 within 15 days of the draft agreement. Appellants submitted their show cause on 12th January, 1996, inter alia, contending that the lessee had an option to renew the lease by giving three months’ notice prior to the expiry of the lease and further a fresh lease deed was required to be executed and registered, hence the provision of Chapter XXC of the Act shall not be attracted. The show cause filed by the appellants was considered and finding no merit, the appropriate authority rejected the same by order dated 24th April, 2001 holding the appellants guilty of not complying with the provisions of Section 269UC of the Act. Accordingly, a complaint was laid on 30th April, 2001 under Section 267AB read with Section 278B of the Act before the Additional Chief Metropolitan Magistrate alleging contravention of Section 269UC of the Act. Learned Magistrate by its order dated 30th April, 2001 took cognizance of the offence and issued process against the appellants.

Citation :
M/S. GOVIND IMPEX (P) LTD. & ORS. VERSUS APPROPRIATE AUTHORITY, INCOME TAX DEPARTMENT