Law:

Section:

Section 3 of the Income-tax Act, 1961 - Previous year - Change of - Assessee-company made an application for change of accounting year from financial year ended on 31-3-1983 to period from 1-4-1982 to 30-6-1983 (i.e., 15 months relevant to assessment year 1984-85) - ITO while granting permission for change of accounting year put condition that assessee would not be allowed depreciation, etc., on plant and machinery installed between 1-4-1983 and 30-6-1983 - Assessee acknowledged ITO's letter but raised objection to conditions imposed while filing return -whether condition imposed by ITO was arbitrary and deserved to be struck off - Held, yes - Whether assessee's acknowledgement of ITO's letter amounted to acceptance of conditions imposed - Held, no - Whether delay of four years on assessee's part in approaching court affected its claim - Held, on facts, no Facts The assessee-company made an application for the change of accounting year from financial year ending on 31-3-1983 to the period from 1-4-1982 to 30-6-1983 (i.e., 15 months relevant to the assessment year 1984-85). The ITO by his order dated 27-5-1982 allowed the assessee to vary the accounting year subject to the condition that the assessee will not be allowed depreciation of the plant and machinery installed between 1-4-1983 and 30-6-1983. The assessee acknowledged on 24-6-1982 the order of the ITO. However, while filing the return for 1984, the assessee objected to the conditions imposed by the ITO. By a special civil application in 1987 the assessee sought reliefs on account of depreciation, etc. The revenue opposed the grant of such reliefs on the ground that there was a delay of five years in coming forward with this objection; that the assessee having accepted the order by his acknowledgement was not allowed to rescind from his acceptance of the conditions imposed and that the conditions imposed were not severable. Held It was clear from the facts of the present case that while the assessee filed the return in 1984 it had objected to the condition imposed by the ITO while granting change of the previous year. There was no question of any bar of limitation as such arising in the instant case. The…

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