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1 - 8 of 8 (0.22 seconds)Section 25 in The Income Tax Act, 1961 [Entire Act]
The Finance Act, 2018
The Income Tax Act, 1961
Commissioner Of Income-Tax, Madras vs K. Srinivasan And K. Gopalan on 22 December, 1952
(a)the twelve months ending on the 31st day
of March next preceding tile year for which
the assessment is to be made, or, if the
accounts of the assessee have been made
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up to a date within the said twelve months in
respect of a year ending on any date other
than the said 31st day of March, then at the
option of the assessee, the year ending on the
date to which his accounts have been so made
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The main part of cl. (i)(a) of s. 2(11) gives the primary
meaning of the expression "previous year", and this meaning
was elucidated by Mahajan, J. in Commissioner of Income-tax,
Madras v. K Srinivasan and K. Gopalan(1) thus:
Section 2 in Income Tax Rules, 1962 [Entire Act]
Income Tax Rules, 1962
Messrs. Dhandhania Kedia & Co vs The Commissioner Of Income-Tax on 17 October, 1958
In Dhandhania Kedia & Co. v. Commissioner
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of Income-tax( ), this Court pointed out that it is a
contradiction in terms to speak of six previous years in
relation to any specified assessment year. Mr. Srinivasan
is not right in submitting that s. 25(1) contemplates 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 usual 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 date of the discontinuance; it does not
contemplate, as counsel submitted, assessments in the same
assessment year in respect of two previous years.
Mr. Srinivasan alternatively submitted that the Income-tax
Officer could accord sanction to the change on the basis
that the income for 21 months should be assessed at the rate
applicable to the income of the last period of 12 months.
This again is an impossible contention. The Income-tax
Officer has no power to vary the rate on which the income of
the previous year is to be assessed. The rate of tax is
fixed by the Finance Act every year. By s. 3, the tax is
levied at that rate for an assessment year in respect of the
income of the previous year. Once the length of the previ-
ous 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.
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