TMI Blog1966 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the assessment order for the year 1952-53, he stated : " The return of income filed for this year is for the period between 1st July, 1950, and 31st March, 1952. The permission to change the previous year is granted subject to the condition that the total income in the period of 21 months ending 31st March, 1952, will be assessed to tax at the rate applicable to the total income in the said 21 months. " The appellant was apparently happy with this order, and he made no protest before the Income-tax Officer. The assessment for the assessment year 1952-53 was accordingly made in respect of the income of the previous year consisting of 21 months commencing from July 1, 1950, and ending on March 31, 1952. In his appeals before the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is court on a certificate granted by the High Court under section 66A(2) of the Indian Income-tax Act, 1922. Mr. Srinivasan repeated before us the contentions which he urged before the High Court. He submitted that the scheme of the Act and particularly sections 2(11) and 3 show that there cannot be a previous year consisting of more than 12 months, and the Income-tax Officer had no power to direct under the proviso to clause (i)(a) of section 2(11) that the previous year should consist of 21 months. We are unable to accept this contention. Section 3 is the charging section. For any assessment year, income-tax is charged on the income of the previous year. Section 3 does not define the length of the previous year. The " previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 12 months, if the accounts of the assessee have been made up to such date. The proviso to sub-clause (i)(a) reads : " Provided that where in respect of a particular source of income, profits and gains an assessee has once been assesssed, or where in respect of a business, profession or vocation newly set up an assessee has exercised the option under sub-clause (c), he shall not, in respect of that source or, as the case may be, business, profession or vocation, exercise the option given by this sub-clause so as to vary the meaning of the expression 'previous year' as then applicable to him except with the consent of the Income-tax Officer and upon such conditions as the Income-tax Officer may think fit to impose. " Sub-claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer may think fit to impose. " If the assessee wants to change the meaning of the previous year as then applicable to him, he must obtain the consent of the Income-tax Officer, and the Income-tax Officer may accord such consent on proper terms. The Income-tax Officer may refuse to give his consent, but if he does give his consent, he has ample power to impose the condition that the full period from the end of the " previous year " for the preceding year's assessment to the end of the new accounting year should be taken as the previous year for the current assessment year. Thus, 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 Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lates two previous years. Section 25(1) provides that in case of discontinuance of any business, profession or vocation in any assessment year, the Income-tax Officer may in that year make an accelerated assessment in respect of the income of the period between the end of the previous year and the date of such discontinuance, in addition to the useful assessment in respect of the income of the previous year. Section 25(1) contemplates the usual assessment in respect of the income of the previous year and a special and separate assessment in the same assessment year in respect of the income of the broken period between the end of the previous year and the end of the discontinuance; it does not contemplate, as counsel submitted, assessments i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
