Regular method employed means method followed in past years which continued to be followed in subsequent years

The provisions of section 145A were inserted by the Finance (No.2) Act, 1998, w.e.f. 1.4.1999. Prior to the assessment year 1998- 99, the entire provisions regarding the method of accounting were contained in section 145 of the Income Tax Act only. As per that section, the income under the head “Profit and gains of business or profession” or “Income from other sources” shall be computed according with either cash or mercantile system of accounting regularly employed by the assessee. In other words, the Act recognizes two system of accounting, cash system of accounting and mercantile sy...