C.S.P. Singh, J.
1. The Income-tax Appellate Tribunal, Delhi Bench ' E ', New Delhi, has referred the following question for our opinion :
' Whether, on the facts and in the circumstances of the case, and on the true interpretation of Section 3(1)(c) read with Section 3(4) (of the I.T. Act, 1961), the Appellate Tribunal was justified in holding that the assessment made on the basis of the previous year from 24th October, 1965, to 31st March, 1967, for the assessment year 1967-68 was not illegal '
2. The first assessment of the assessee was made in the assessment year 1965-66 and the previous year adopted in that assessment year was from 15th November, 1963, to 31st December, 1964. The previous year adopted by the assessee for the assessment year 1966-67 is not apparent from the record of the case. It appears from the order passed by the ITO that before the proceedings under Section 148 of the Act were taken for the assessment year 1967-68, with which we are concerned in the present reference, the assessee had moved a petition for settlement before the CIT, Kanpur, and as a result of the settlement he filed a return of income for the assessment year 1967-68. In this return the previous year was shown as from 24th October, 1965, to 31st March, 1967. The ITO, treating the assessee as a registered firm under Section 183(b) of the Act, passed an assessment order. The assessee thereafter filed an appeal, and one of the contentions sought to be raised before the AAC was that inasmuch as in the first assessment year, i.e., 1965-66, the accounting period was taken to have ended on the 31st December, 1964, a change in the previous year for the assessment year 1967-68 could not be effected. The AAC did not allow the assessee to take up this plea. The matter was then taken up before the Tribunal. The Tribunal allowed the plea to be urged but has held against the assessee. The main reason for the case being decided against the assessee by the Tribunal is based on the consideration that the assessee had voluntarily shown its previous year as from 24th October, 1965,to 31st March, 1967, and inasmuch as the ITO had acted upon that return, the ITO should be treated as having consented to the change made by the assessee. It sought support for its view on a decision of the Punjab High Court in the case of Karnal Kaithal Co-op. Transport- Society Ltd v. CIT . Counsel for the assessee contended that inasmuch as under Section 3(4), the provisions under which the previous year can be changed, require the ITO to give his consent on such conditions as the ITO thought fit to impose, there should be a conscious act on the part of the ITO before it could be inferred that consent has been given. He drew our attention to Black's Dictionary where consent has been defined to mean an act of reason, accompanied with deliberation, the mind weighing as in a balance the good or evil on each side. This may be so, but consent can either be express or implied. There is a reference to consent of both the types in this very dictionary. So far as implied consent is concerned it has been stated to mean one manifested by signs, actions, or facts or by inaction or silence, which raise a presumption that consent has been given. In the present case there is no express order passed under Section 3(4) and neither any formal application was made by the assessee for permitting him to change his previous year. The Act does not, however, require an application in a particular form being given by the assessee for being permitted to change his previous year. The Punjab High Court in Karnal Kaithal Co-op. Transport Society Ltd. , has held that consent can be implied from the fact that the assessee in his return had voluntarily changed the previous year and the ITO had acted on it. In the present case, we find that not only the assessee had voluntarily changed his previous year, and the ITO had acted on it, but the return was filed after a settlement was arrived at with the assessee and the Commissioner. Those three sets of facts clearly lead to the conclusion that the ITO had consented to the change of the previous year by the assessee. Counsel for the assessee drew our attention to a decision of this court in the case of Gauri Sahai Ghisa Ram v. CIT : 120ITR338(All) , where talking of the manner in which an assessee changes his previous year it was observed that the change implied a deliberate or voluntary change at the instance of the assessee. This case does not, however, lay down as to how the consent of the ITO is to be inferred. It is not an authority for the proposition that unless there is an express order of the ITO regarding his consent to the change of the previous year by an assessee, consent cannot be inferred from the acts of the ITO. So far as the assessee is concerned he had voluntarily effected a change of his previous year by filing a return for a changed period. We are, therefore, of the view that the Tribunal was right in its conclusion that the ITO had consented to the change of the previous year.
3. We accordingly answer the question in the affirmative, in favour of the Department, and against the assessee. The Department is entitled to its costs, which are assessed at Rs. 250.