Case Law Details
RELEVANT PARAGRAPH
13. It may be mentioned that provisions of section 145A were inserted by the Finance Act No. 2, 1998 w.e.f. 1-4-1999. It may be mentioned that prior to assessment year 1998-99 the entire provisions relating to method of accounting were contained in sec. 145 only. As per that sec. The income under the head ‘profits and gains of business’ or ‘other sources’ shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. In other words, me Income lax Act, 1961 recognised two systems of accounting, cash system of accounting and mercantile system of accounting as the methods of accounting.
It was also provided in the same section that the Central Government is authorized to notify from time to time the accounting standards to be followed particularly in case of assessee or in respect of any income. In pursuance thereof, certain accounting standards were issued by means of notifications. By Notification No. S069E dated 25-1-1996 reported in 1996, 218 ITR Statute I were issued (to maintain the brevity in the order the said Notification is not reproduced) Accounting Standard –II, by its clause (a) provides that a change in the accounting policy shall be made only if the adoption of a different accounting policy is required by the Statute or if it is considered that the change would result in a more appropriate preparation or presentation of the financial statement by an assessee. The said clause reads as under :-
“9. A change in an accounting policy shall be made only if the adoption of a different accounting policy is required by statute or if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements by an assessee.”
14. The provisions of sec. 145A start with non-obstante clause. A clause beginning with “notwithstanding anything contained in this Act or in some particular provision in the Act or in some particular Act or in any law for the time being in force” is sometimes appended to a section in beginning, with a view to give the enacting part of the section in case of conflict an overriding effect over the provision or Act mentioned in the non-obstante clause. Union of India v/s. G.M. Kokil (1984) Supp. SCC/96). It is equivalent to showing that inspite of the provision or Act mentioned in the non-obstante clause the enactment following it will have full operation or that the provisions impressed in the non-obstante clause will not be an impediment for the operation of the enactment. Thus, a non-obstante clause may be used as a legislative device to modify the ambit of the provision or law mentioned in the non-obstante clause or to override it in specified circumstances.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
