Law: Income Tax Act, 1922

Section: 2, 66(2)

Income-tax---Previous year-Power to allow change-Change to a previous year of 9 months allowed on condition that rate for 12 months should be applied-Validity of condition-Extension of Indian Income-tax Act to Mysore - Consequences - Change in "previous year"-Indian Income-tax Act, 1922, S. 2(ll~-Finance Act, 1950, S. 13. The Mysore Income-tax Act, 1923 was repealed and the Indian Income-tax Act was extended to the erstwhile Mysore State by section 13 of the Finance Act, 1950, with effect from the lit of April 1950. For the assessment year 1949-50, the assessee was assessed under the Mysore Income-tax Act on his income earned during the accounting year ended on 30th June 1949. The assume submitted his return for the assessment year 1950-51 commencing on the first of April 1950, in respect of the income earned during the period of nine months from July 1, 1949 to March 31, 1950. He sought the consent of the Income-tax Officer for allowing him to chance the financial year ending on 31st March and the request was granted by the Income-tax Officer, but with a condition that the income of the period from July 1, 1949 to March 31, 1950, would be assessed at the rates applicable to the income of twelve months. Held : 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 rates specified in the Finance Act and at no other rate. The discretion vested in the Income-tax Officer under the proviso is limited to the period of "previous year" only. The assessee's Income for the nine months ended on March 31, 1950 can be taxed only at the rates applicable for the Income of the said period of nine months and not at the rates applicable for twelve months' income.                                                                                                                …