32.  Method of accounting:-

(1)   Income, profits and gains except income from dividends, shall be computed for purposes of sections 17, 19, 22, 27 and 30 in accordance with the method of accounting regularly employed by the assessee.

(2)   Notwithstanding anything contained in sub-section (1), the Central Board of Revenue may, in the case of any business or profession, or class of business, or profession, or any other source of income or any class of persons,-

(a)    require, by a general or special order published in the official Gazette that the accounts shall be maintained in such form and in such manner as may be prescribed; and

(b)    prescribe the manner in which payments of commercial nature shall be made or commercial transactions recorded, and thereupon, the income, profits and gains of the assessee shall be computed on the basis of the accounts or records maintained or payments made accordingly.

(3)   Where no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Deputy Commissioner, the income, profits and gains cannot be properly deduced therefrom, or where, in any case to which sub-section (2) applies, the assessee fails to maintain accounts, make payments or record transactions in the form or manner, as the case may be, prescribed under the said subsection, then, the income, profits and gains of the assessee shall be computed on such basis and in such manner as the Deputy Commissioner thinks fit.

(4)   For the purpose of sub-section (3), where the Central Board of Revenue deems necessary, it may, by a general or special order in writing, prescribe rates of net profit or gross profit and conditions of their applicability in respect of any trade, business or profession for any assessment year or years:

Provided that such rates shall be applicable in case of an assessee at his option to be exercised in writing before finalisation of assessment proceedings for an assessment year.