Lecture basic features of income tax background/History Income Tax Act of 1922

Classes of taxpayer regarding Special Tax Year

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Classes of taxpayer regarding Special Tax Year:

Classes of Tax payers

Special Accounting Year

Companies manufacturing Jute goods

1st July to 30th June

Companies manufacturing Sugar

1st October to 30th September

All persons exporting rice and carrying insurance business

1st January to 31st December

All persons carrying on business of cotton ginning, rice husking

1st September to 31st August

and oil milling

1st April to 31st March

All people carrying on business of manufacturing and dealing in


1st January to 31st December

All Insurance Companies

Explanation—a tax year can be a period of less than 12 months under special circumstances for example discontinuance of business u/s 117.
Section 117 is reproducing below:
117. Notice of discontinued business
(1)Any person discontinuing a business shall give the Commissioner a notice in writing to that effect within fifteen days of the discontinuance.

  1. The person discontinuing a business shall, under the provisions of this Ordinance or on being required by the Commissioner by notice, in writing, furnish a return of income for the period commencing on the first day of the tax year in which the discontinuance occurred and ending on the date of discontinuance and this period shall be treated as a separate tax year for the purposes of this Ordinance.

  1. Where no notice has been given under sub-section (1) but the Commissioner has reasonable grounds to believe that a business has discontinued or is likely to discontinue, the Commissioner may serve a notice on the person who has discontinued the business or is likely to discontinue the business to furnish to the Commissioner within the time specified in the notice a return of income for the period specified in the notice.

  1. A return furnished under this section shall be treated for all purposes of this Ordinance as a return of income, including the application of Section 120.

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