Section 255(4) of the Income Tax Act
The decision most relied on for Section 255(4) is Berger Paints India Ltd. v. CIT (266 ITR 99), cited in 181 of the 39 judgments on BharatTax that turn on this section.
Leading authorities on Section 255(4)
The Revenue cannot take a conflicting stand from what it had earlier accepted in a previous assessment year without compelling justification. This principle of consistency applies to various issues, including the treatment of customs duty in closing inventory.
The Revenue is bound by the rule of consistency and cannot adopt a divergent position in a subsequent assessment year unless there is a change in facts or law.
Income derived from leasing a business asset is considered business income under Section 28 of the Income-tax Act, 1961.
A wrong decision, even if followed in earlier years, cannot be perpetuated on the basis of the principle of consistency if it contravenes the correct law and facts.
The rule of consistency should not be applied to perpetuate an anomaly or a patently wrong view taken in the past.
Rental income from letting out a commercial complex is assessed as income from house property, not business income, where the assessee is not engaged in any business activity.
