Chandramauli Kr. Prasad, J. - (1.) 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 30 th April, 2001 took cognizance of the offence and issued process against the Appellants.
(2.) Appellants filed writ petition before the High Court for quashing the aforesaid order dated 24th April, 2001 of the appropriate authority rejecting their show cause and deciding to file criminal complaint. However, since the prosecution had already been launched against the Appellants, the Division Bench of the High Court directed for treating the writ petition as an application under Section 482 of the Code of Criminal Procedure Code. Ultimately, the learned Single Judge by order dated 10th October, 2002 dismissed the same and while doing so observed as follows: In the present case also, it is clearly stipulated in para 1 of the lease deed that the lease was extendable purely at the discretion and option of the Lessee on the second part for a further period of nine years. On a conjoint reading of paras 1 and 12 of the lease deed, it becomes clear that lessor intended the lease to last for 18 years. The lessor could not have refused to renew/extend the lease after first term if the lessee complied with the conditions for renewal/extensions. So in view of explanation to Section 269UA(f)(i) of the Act, the total terms of the lease will be 18 years no matter whether it is for a single term of 18 years or two terms of nine years each or three terms of six years each or six terms of three years each. Whether the subsequent terms are described as extensions or renewals is immaterial for the purpose of Section 269UA(f)(i). If the aggregate of the original term and stipulated extension/renewal comes to more than 12 years, such a lease will fall under the purview of explanation to Section 269UA(f)(i) of the Act and it will be considered to be a lease for not less than 12 years thereby making the provisions of Chapter XXC of the Act application there to.
(3.) Aggrieved by the same the Appellants have preferred this appeal with the leave of the Court.;