Broken-period assessment under income tax law does not extend the previous year or preserve firm registration for the later period.

Section 25(1) of the Income-tax Act, 1922 is an enabling provision for special assessment on discontinuance or dissolution of business. It permits assessment of income of the broken period in addition to the normal assessment for the previous year, but it does not create a second previous year or expand the earlier previous year to cover income arising after that year. On this analysis, the broken period from 1 July 1959 to dissolution could not be brought into assessment year 1960-61 for registration purposes, and the firm was treated as an unregistered firm for that broken period.

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Issues: Whether the income for the broken period from 1 July 1959 to the date of dissolution was assessable as part of the previous year relevant to assessment year 1960-61, with the result that the firm continued to be registered for that period.

Analysis: Section 25(1) of the Income-tax Act, 1922 is an enabling provision for accelerated assessment on discontinuance or dissolution of business. It authorises a special assessment of the income of the broken period in addition to the ordinary assessment for the previous year, but it does not create two previous years for the same assessment year or enlarge the earlier previous year to include the subsequent broken period. The charge under the Act remains on the income of the previous year under the normal scheme, and the special provision cannot be used to shift the broken period into assessment year 1960-61 merely because the earlier year had already been assessed or the registration certificate had been issued for that year.

Conclusion: The broken period could not be treated as falling within assessment year 1960-61 for registration purposes. The firm was liable to be assessed as an unregistered firm for the broken period, and the answer was against the assessee and in favour of the Revenue.

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