Late change of previous year under the Income-tax Act refused where the delay could prejudice Revenue.

A late request to alter the previous year under section 3(4) of the Income-tax Act, 1961 was refused because it was made long after the close of the relevant assessment year and after advance tax had already been paid on the basis of a 12-month period. The Income-tax Officer's discretion was exercised against the assessee, and no illegality in that exercise was shown. The court accepted that allowing the change at such a stage could prejudice the Revenue. The refusal to change the previous year was therefore justified, and the referred question was answered in favour of the Revenue.

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Issues: Whether the assessee was entitled to seek a change in the previous year long after the close of the relevant assessment year, and whether the refusal of the Income-tax Officer on the ground of delay was justified under section 3(4) of the Income-tax Act, 1961.

Analysis: The request for alteration of the previous year was made only in 1984 for assessment year 1981-82, after advance tax had already been paid on the basis of the full 12-month period. The discretion under section 3(4) was exercised by the Income-tax Officer against the assessee, and no illegality in that exercise was shown. The Court accepted that permitting the change at such a late stage could prejudice the Revenue.

Conclusion: The rejection of the assessee's request for change in the previous year was justified and the answer to the referred question was in the affirmative against the assessee and in favour of the Revenue.

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