ESTHURI ASWATHIAH Vs. COMMISSIONER OF INCOME TAX MYSORE

JUDGEMENT

(1.) The appeal raises a question of interpretation of the proviso to cl. (i) (a) of S. 2(11) of the Indian Income-tax Act, 1922. Up to the assessment year 1951-52, the appellant adopted the year ending on June 30 as the "previous year" applicable to him. The assessment for the assessment year, 1951-51 was accordingly made in respect of the previous year ended on June 30, 1950. For the assessment year, 1952-53, the assessee filed a return for 21 months commencing on July 1, 1950 and ending on March 31,1952, and requested the Income-tax Officer to accord his sanction to the change of the previous year from an year ending on June 30 to an year ending on March 31. The Income-tax Officer duly sanctioned the change. In the assessment order for the year, 1952-53 he stated:

(2.) Mr. Srinivasan repeated before us the contentions which he urged before the High Court. He submitted that the scheme of the Act and particularly Ss. 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 Cl. (i) (a) of S 2 (11) that the previous year should consist of 21 months. We are unable to accept this contention.

(3.) 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" is defined in S. 2(11). The main part of cl. (i)(a) of S. 2(11) reads :