Meaning of “For the relevant previous year”

The meaning of for the relevant previous year under section 104 to 109 of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble Income Tax Appellate Tribunal tried to explain the meaning of for the relevant previous year.

Meaning of for the relevant previous year defined by court

The phrase ‘for the relevant previous year‘ used in section 104 to 109 of the Income Tax Act came up before Hon’ble ITAT-Delhi in Dalmia Agencies Ltd. Vs. ITO [1988] 27 ITD 427 (DELHI-TRIB.) and it explained.

Meaning: The explanation to section 104(4)(a) uses the expression ‘for the relevant previous year’ immediately after the expression ‘gross total income‘. The expression ‘for the relevant previous year’ suggests that the process of finding out whether the income attributable to the activities of manufacture or processing of goods was more or less than 51 per cent of the total income has to be exercised every year.

Section 104 of Income Tax Act

Income-tax on undistributed income of certain companies.

104. [Omitted by the Finance Act, 1987, w.e.f. 1-4-1988.]

In this article, you can get guidance from high courts on the meaning of for the relevant previous year under section 104 to 109 of the Income Tax Act.

Updated up to Finance Act 2021