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TMI BlogWealth Tax Act-Loss to revenue on account of change in previous year u/s 3(4).X X X X Extracts X X X X X X X X Extracts X X X X ..... d unhappiness over the situation in the following terms:- Para 2.14 Audit has pointed out an instance wherein a change in the previous year permitted by the Income-tax Officer to an assessee trust had resulted in loss of revenue of about Rs. 4,88,000 in that the wealth valued at Rs. 72,26,500 had escaped assessment to wealth-tax in respect of the assessment year 1974-75. Such instances have come to notice in the past also wherein consent given by the Income-tax Officer for the change of the accounting year had resulted in loss of revenue. Under Section 3(4) of the Income-tax Act, 1961 an assessee can change his previous year in respect of a business or profession with the consent of the Income-tax Officer, upon such conditions as the I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s year, he must consider the terms put forward by the assessee carefully and if he find that the terms are insufficient to safe-guard the interest of revenue, he has a good ground for refusing the change. Following guidelines are given with a view to protect the interests of revenue under the Wealth Tax Act while allowing a change of previous year:- 3.2 The Wealth tax is levied on net wealth of person on a particular date known as the valuation date. The valuation date as defined in Section 2(q) of the Wealth Tax Act is linked with the previous year as defined in Section 3 of the Income tax Act, 1961. The previous year is either the financial year preceding the assessment year or any other accounting year ending on any date falling within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llised on the valuation date not on the first date of the assessment year, though the tax is levied and becomes payable in the relevant assessment year. The ITO has also to compare the rates of tax for the original previous year and the changed previous year and the concessions in the from of deductions and exemptions relevant for these two years, while considering the interests of revenue. If any such case comes to the notice of the Commissioner of Income-tax, where there is a loss of revenue or an escapement of assessment, he may invoke the provisions of Section 263 of the Income Tax Act (or Sec.25(2)of the W.T. Act). 3.5 It may also be pointed out that there may be cases where no formal application is made requesting for a change in pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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