Court upholds Income-tax Act change, denies Revenue reference. Appellate Tribunal decision affirmed.

The High Court of Punjab and Haryana declined the reference brought by the Revenue, as it determined that the consent for changing the previous year under section 3(4) of the Income-tax Act, 1961 had been granted. The court found that the Appellate Tribunal's decision to affirm the order of the Income-tax Officer was correct, as it was based on the factual determination that consent had been given. Consequently, the court concluded that no legal issue necessitated its intervention, and no costs were awarded in the case.

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Issues:
1. Interpretation of section 3(4) of the Income-tax Act, 1961 regarding the change of the previous year.
2. Whether the Appellate Tribunal was right in affirming the order of the Income-tax Officer and directing him to proceed as if consent for change of the previous year had been granted.

Analysis:
The judgment delivered by the High Court of Punjab and Haryana involved a dispute regarding the interpretation of section 3(4) of the Income-tax Act, 1961, and the decision of the Appellate Tribunal in affirming the order of the Income-tax Officer. The case revolved around the consent for varying the meaning of the expression "previous year" from the calendar year to the financial year. The assessee firm had applied for consent under section 3(4) to change the previous year and contended that the consent had been granted by the Assessing Authority's predecessor. However, the Assessing Authority rejected this contention due to the unavailability of the application and orders. The Appellate Assistant Commissioner reversed the order, remanding the case for reassessment based on the assumption that consent had been granted. The Revenue appealed to the High Court through a reference for mandamus questioning the decision of the Appellate Tribunal.

The High Court observed that the question of whether the Income-tax Officer had given consent for changing the previous year was a factual matter. The Revenue argued that the consent was not explicitly granted, and the Appellate Assistant Commissioner wrongly assumed it to be deemed. However, the High Court rejected this argument, stating that the finding implied that the consent had indeed been granted. The Tribunal also rejected the version provided by the Assessing Authority's predecessor, indicating acceptance of the assessee's claim. Therefore, the High Court concluded that since the consent was found to have been granted under section 3(4), no legal question requiring determination by the court arose from the Appellate Tribunal's order.

In the final decision, the High Court declined the reference, emphasizing that the interpretation of the Appellate Tribunal's order and the findings of the lower authorities did not support the Revenue's argument. The court also ruled that no costs were to be awarded in this matter.

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