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TMI Blog1980 (4) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 400 per month as liquidator of Vijaya Commercial Bank Ltd. He was also getting a remuneration of Rs. 400 per month as editor of Indian Law Reports. Till the assessment year 1968-69, the remuneration received by the assessee as liquidator and also as editor was being assessed as salary income. In the assessment year 1969-70, the same was assessed under the head "Profession ". So far as the salary as a judge of the High Court was concerned, the assessee maintained separate accounts for that source, as a new source of income from salary had arisen from the date of his appointment as a judge with effect from August 21, 1968. The accounts in that direction were opened on August 21, 1968, and they were made up till 31st July, 1969. So far as the salary as a judge of the High Court was concerned, the same was not returned while filing the return for the assessment year 1969-70, on the basis that in so far as that source was concerned, separate accounts were maintained and they were closed on July 31, 1969. According to the assessee, the salary income as a judge of the High Court cannot be assessed for the assessment year 1969-70, but it can be assessed only for the assessment year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO's order. It is under those Circumstances that this reference is made to us by the Tribunal at the instance of the Addl. Commissioner, Andhra Pradesh; Hyderabad. Sri P. Rama Rao, the learned counsel appearing for the revenue, supported the view taken by the Commissioner. Sri Anjaneyulu, the learned counsel appearing for the assessee, submitted that the view that the assessee's case was not governed under s. 3(1)(b) of the Act was erroneous in view of the fact that there cannot be a " previous year " for any assessment year in respect of a new source of income unless the accounts maintained by the assessee have been made up to a date within the financial year preceding the assessment year and that in the present case the financial year preceding the assessment year 1969-70. was the period between April 1, 1968, and March 31, 1969, and inasmuch as the accounts of the assessee were opened on August 21, 1968, and made up only on July 31, 1969 (which fact was not disputed), the date of making up of the accounts fell on July 31, 1969, beyond the financial year preceding the income-tax assessment year 1969-70 and, therefore, there is no previous year at all for this new source of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Courts.- Article 221 of the Constitution of India provides for the salaries and allowances of judges of High Courts, cl. (1) of which reads thus: (1) There shall be paid to the judges of each High Court such salaries as are specified in the Second Schedule." The Second Schedule appended to the Constitution provides by sub-cl. (1) of cl. 10 thereof that There shall be paid to the judges of High Courts, in respect of time spent on actual service, salary at the following rates per mensem, that is to say,-...... Any other judge-Rs. 3,500." Article 202 deals with, annual financial statement which, in so far as it is material, reads thus " 202. Annual financial statement.,-(1) The Governor shall in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year, in this Part referred to as the 'annual financial statement'. (2) The estimates of expenditure embodied in the annual financial statement shall show separately- (a) the sums required to meet expenditure I described by this Constitution as expenditure charged upon the consolidated f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is not the case of the revenue that in respect of the salary as judge of the High Court, the assessee cannot choose his previous year. To our mind, there is also no doubt that in respect of salary income of the assessee as judge of the High Court, he can choose a different previous year as the salary forms a different source as far as the assessee is concerned. The Additional Commissioner of Income tax has also not stated in his order that the assessee cannot choose separate previous year in so far as the income of salary as judge of the High Court is concerned." It is in the background of the aforesaid facts and circumstances of the case that the question referred to us shall have to be examined which involves the interpretation of s. 3(1)(b) of the Act. As has already been extracted, it provides that for the purpose of the Act, " previous year " means-" if the accounts of the assessee have been made up to a date within the said financial year, then, at the option of the assessee, the twelve months ending on such date " and under s. 4 of the Act, incometax shall have to be charged for the assessment year in respect of the total income of the previous year of every asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee's case. It is not out of place to refer to what has been brought to our notice during the course of arguments by the learned counsel for the assessee that the error committed by the Tribunal was set right by itself while dealing with the appeal for the subsequent income-tax assessment year 1970-71. A copy of the order passed by the Tribunal for the income-tax assessment year 1970-71 in I.T.A. No. 1853 (Hyd)/75-76 dated July 22, 1977, was filed during the course of arguments before us, where the assessee's contention that s. 3(1)(b) of the income-tax Act, was applicable was accepted and upheld by the Tribunal while disposing of the appeal for the incometax assessment year 1970-71, which is characterised by the learned counsel appearing for the assessee, as a correct view of the matter and we agree with that characterisation. Even otherwise, the learned counsel for the assessee submitted, without prejudice to his submissions made in the context of the applicability of s. 3(1)(b) of the Act, that s. 3(1)(c) is applicable to the facts of the case as opined by the Tribunal and inasmuch as the Central Board of Direct Taxes did not determine any previous year for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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