Section 145:
Method of accounting.
1(1) Income chargeable under the head “Profits and gains of business
or profession” or “Income from other sources” shall, subject to the provisions of sub-section (2), be
computed in accordance with either cash or mercantile system of accounting regularly employed by the
assessee.
(2) The Central Government may notify in the Official Gazette from time to time 2
income
computation and disclosure standards to be followed by any class of assessees or in respect of any class
of income.
(3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts
of the assessee, or where the method of accounting provided in sub-section (1) 3
has not been regularly
followed by the assessee, or income has not been computed in accordance with the standards notified
under sub-section (2), the Assessing Officer may make an assessment in the manner provided in
section 144.
Notes:
1. Subs. by Act 22 of 1995, s. 31, for section 145 (w.e.f. 1-4-1997).
2. Subs. by Act 25 of 2014, s. 52, for “accounting standards” (w.e.f. 1-4-2015).
3. Subs. by s. 52, ibid., for “or accounting standards as notified under sub-section (2), have not been regularly followed by
the assessee” (w.e.f. 1-4-2015).