Sec 3(4)-Change in previous year. - Income Tax - 1341/CBDT

INSTRUCTION NO. 1341/CBDT Dated: July 21, 1980 Attention is invited to Board's Instruction No.1002 dated 26-8-76 explaining the circumstances under which a change in the previous year allowed by an ITO u/s.3(4) of the I.T.Act 1961 would lead to loss to revenue. 2. A case has come to the notice of the board where as a consequence of allowing a change in the previous year there was considerable loss to revenue in the form of wealth tax. The ITO's order u/s.3(4) in the case under consideration had allowed the assessee a change from the financial year to calender year, with the result the previous year was extended to a period of 21 months from 1-4-73 to 31-12-74. Consequently there was no previous year for the assessment year 1974-75 and therefore there was no valuation date ending 31-3-74 for assessing the net wealth of the assessee for assessment year 1974-75. This resulted in substantial loss of revenue under the Wealth-Tax Act, 1957. 3. The board while reiterating Instruction No.1002 desire that before allowing the change in the previous year, the possible loss to revenue under the Wealth Tax Act should also be taken into account. 4. These instructions may kindly be brought to the notice of all officers working in your charge.