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Issues:
1. Appealability of order of the Income-tax Officer under section 3(4) of the Income-tax Act, 1961. 2. Validity of revoking permission to change the previous year granted by one Income-tax Officer by a subsequent Income-tax Officer. Analysis: Issue 1: The first issue revolves around the appealability of the Income-tax Officer's order under section 3(4) of the Income-tax Act, 1961. The case involved the assessee seeking to change their accounting year from Diwali year to the financial year for the assessment years 1973-74 and 1974-75. The Income-tax Officer granted permission with conditions. The Tribunal held that the appeal by the assessee against the order was maintainable. The High Court affirmed this decision, emphasizing that the determination of the accounting period is integral to the assessment process, making the order appealable under section 246(c) of the Act. The Court highlighted that the computation of income and tax liability is directly linked to the accounting period, justifying the appeal against the order. Issue 2: The second issue concerns the revocation of permission granted by one Income-tax Officer to change the accounting year by a subsequent Officer. The case involved the successor Income-tax Officer attempting to disallow the change in the accounting year previously permitted. The Tribunal and the High Court held that once permission is granted by one Officer, a successor cannot arbitrarily revoke it. The Court cited a similar case from the Allahabad High Court, emphasizing that conditions imposed on changing the accounting year should not be ambiguous or superfluous. The Court ruled that the successor Officer's decision to treat the Diwali year as the accounting period was erroneous and lacked jurisdiction, affirming the assessee's right to change the accounting year. The judgment favored the assessee on both issues, directing parties to bear their own costs. In conclusion, the High Court upheld the appealability of the Income-tax Officer's order under section 3(4) of the Act and affirmed the assessee's right to change the accounting year, emphasizing the importance of clarity in conditions imposed and the jurisdictional limits of successive Officers in such matters.
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