ESTHURI ASWATHIAH vs COMMISSIONER OF INCOME-TAX, MYSORE

The Supreme Court held that under Section 2(11) of the Income-tax Act, 1922, the length of a previous year need not be limited to 12 months, allowing for a previous year of 21 months as sanctioned by the Income-tax Officer. The Court clarified that the Income-tax Officer has the authority to impose conditions on the change of the previous year to safeguard revenue interests, and that the concept of having two previous years for the same assessment year is not permissible under Section 3. The Court upheld the decision of the lower authorities, confirming the assessment based on the 21-month period.