TaxTMI 
TaxTMI 
2019 (4) TMI 712
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....e Income Tax Act, 1961. It is their case that they have been filing returns under the Income Tax Act right from the year 1973. It is the case of the Assessing Officer that the petitioner has let out the property to their Associate Company, who is a specified person under section 13(3) of the Income Tax Act. 3. It is the case of the Department that the market rent for the said properties are much higher than what the petitioner is collecting from them as rent. It is the petitioner's case that the Department has wrongly assessed the market rent for the properties let out by the petitioner at Rs. 1,79,67,636/- whereas, as per the returns filed by the petitioner, the actual rent received from the respective tenants is only Rs. 5,34,372/-....
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.... receipt of any excess amount from their associate companies towards rent, the petitioner is not liable to pay tax as per the Central Board of Direct Taxes (CBDT)'s circular in No.5-P(LXX-6) dated 19.05.1968 which reads as follows:- "2. Section 11(1) provides that subject to the provisions of ss.60 to 63, the following income shall not be included in the total income of the previous year...'The reference in sub-s.(1)(a) is invariably to 'income' and not to 'total income'. The expression 'total income' has been specifically defined in s.2(45) of the Act as 'the total amount of income...computed in the manner laid down in this Act.' It would, accordingly, be incorrect to assign to the word '....
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....ey have already deposited Rs. 5,00,000/-, with the Assessing Officer at the time of filing appeal before the second respondent as against the assessment order dated 14.12.2018 passed by the first respondent. According to the petitioner, the assessing officer ought to have granted stay of recovery of the amount as per the assessment order dated 14.12.2018. In such circumstances, the instant writ petition has been filed. 7. Heard Mr.Vijayaraghavan, learned counsel for the petitioner and Mrs.S.Srimathy, learned standing counsel accepts notice on behalf of the respondents. 8. The learned counsel for the petitioner drew the attention of this Court to the judgment made by the learned Single Judge of this Court in Samms Juke Box vs., Assi....
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....) is whether merely because a payment was reflected in form 26AS and shown to have been made to the assessee, can it be brought to tax, in the absence of proof to show that the assessee was the actual beneficiary of the said payment." Therefore, according to him, the Assessing Officer has committed an error in dismissing the stay application on the ground that the internal circular of the Department requiring assesses to deposit 20 % of the disputed tax amount for the purpose of obtaining stay of recovery has not been complied with. 9. Per contra, the learned standing counsel for the respondents would submit that the Assessing Officer is bound by the circular in Instruction No.1914 dated 31.07.2017 and therefore, he was right in dismi....
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....ner that when a prima facie case has been made out, the Commissioner of Income Tax (Appeals) is not bound by the internal circular involving high pitched tax assessment. In the instant case also, it is an high pitched tax assessment as seen from the assessment order, which is subject matter of challenge before the Commissioner of Income Tax (Appeals). 12. This Court is of the considered view that prima facie case has been made out by the petitioner since the Associate Companies who are their tenants from the date when the petitioner obtained exemption from payment of income tax under Section 12A(a) of the Income Tax Act right from the year 1973 onwards. In the instant case, the Income Tax Department has raised the issue only for the Asse....