Law:

Section:

Section 3 of the Income-tax Act, 1961 (Corresponding to section 2(11) of Indian Income-tax Act, 1922), read with section 13 of Finance Act, 1950 - Previous year - Assessment year 1950-51 - Assessee had been assessed under Mysore Income-tax Act on his income earned during accounting year ended on 30-6-1949 - With Act of 1922 being extended to erstwhile Mysore State, assessee sought ITO's consent for allowing him to change financial year ending on 31st March - ITO allowed change with condition that income for period from 1-7-1949 to 31-3-1950 would be assessed at rates applicable to income of twelve months - Appellate authorities confirmed that order - Whether once length of 'previous year' was fixed and income of 'previous year' was determined that income must be charged at rates specified in Finance Act and at no other rate - Held, yes - Whether discretion vested in ITO under proviso to clause (a) of section 2(11) of 1922 Act was limited to period of 'previous year' only, and ITO having accorded consent for change of 'pervious year' to cover period of nine months from 1-7-1949 to 31-3-1950, had no power under Act to impose a condition to charge tax at rate higher than rate charged under Finance Act - Held, yes - Whether assessee's income for nine months ended on 31-3-1950, could, therefore, be taxed only at rates applicable for income of said period of nine months and not at rates applicable for income of 12 months - Held, yes FACTS The Mysore Income-tax Act, 1923, was repealed and the 1922 Act was extended to the erstwhile Mysore State by section 13 of the Finance Act, 1950, with effect from the 1-4-1950. Under the 1922 Act, the 'financial year' commences on the first of April, and the expression 'previous year' is defined in section 2(11). 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 30-6-1949. By reason of the repeal of the Mysore Income-tax Act and the extension of Act, the first assessment year under the Act commencing on the first of April, so far as the erstwhile Mysore State was concerned, was the assessment year commencing on the 1-4-1950. The…

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