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1966 (1) TMI 25 - SC - Income TaxWhether the Income-tax Officer is entitled to have the length of the 'previous year' as 21 months though the assessee itself applies for such a change? Held that:- If the previous year at any given time applicable to the assessee ends on June 30 and he wants to vary it so as to make it end on March 31 next, the Income-tax Officer has power to accord sanction to the change on the condition that the previous year would consist of the entire period of 21 months commencing on June 30 of the year up to which his accounts were last made up to March 31 of the year up to which his accounts are newly made up. The condition properly safeguards the interest of the revenue. Had he sanctioned the change on the footing that the previous year of the assessee in relation to the current assessment year would be the period of 12 months from April 1 to March 31, the income of the preceding 9 months from July 1 to March 31 would have escaped taxation altogether. Once the length of the previous year is fixed and the income of the previous year is determined, that income must be charged at the rate specified in the Finance Act and at no other rate. The order of the Income-tax Officer, in substance, permitted the change of the previous year on condition that the previous year in relation to the assessment year 1952-53 would consist of the period of 21 months commencing from July 1, 1950, and ending on March 31, 1952. The Income-tax Officer had power to impose this condition. The further condition that the income of the previous year of 21 months would be assessed at the rate applicable to the income for 21 months is redundant. Once the length of the previous year is found to be a period of 21 months, the income of the entire period of 21 months must be considered to be the income of the previous year relevant for the assessment year 1952-53, and the entire income must be assessed at the rate specified in the relevant Finance Act. Appeal dismissed.
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