ORDER P.V. Dixit, C.J. This is a reference under section 66(1) of the Income-tax Act at the instance of the assessee and the questions referred to us by the Appellate Tribunal for decision are:- (i) What is the 'previous year' in respect of the source of income, viz. managing agency and selling agency and financing of the Binod Mills Ltd., Ujjain, for the purpose of assessment for the assessment year 1950-51 - whether the year ended 31-3-1950 or the year ended Diwali, 1951? (ii) Whether the selling agency commission attributable to sales made to parties in Part A States accrued in Part A States? (iii) Whether for the purpose of bringing to tax the dividend income of the assessee for the assessment year 1950-51 and having regard to paragraph 12 of the Part B States (Taxation Concessions) Order, 1950, (a) the net dividend income, say of Rs. 34,468 (gross Rs. 50,137 has been rightly brought to tax, both income-tax and super tax, without any concession in regard to the tax payable thereon; (b) the net dividend income, say of Rs. 2,28,392 has been rightly subjected to super tax at Part B States rates to super tax only? The facts briefly stated are that the assessee is a Hindu Undivided Family with its head office at Indore and branches at several other places in former Part B States, such as Madhya Bharat which included Indore and Gwalior States, Hyderabad (Dn.) State, Rajasthan etc. It derives its income from several sources such as property, dividends, business, managing agency commission, shares in partnership firms etc. The assessee family was at one time carrying on business in Bombay and was assessed in the status of a non-resident Hindu undivided family. Its business was, however, closed down for some time in 1945 and no assessment was made for the years 1948-49 and 1949-50. In the course of the assessments before the assessment year 1948-49 in the status of the assessee as a non-resident Hindu undivided family the previous year adopted by the assessee was the appropriate Diwali year. Its business was, however, closed down for some time in 1945 and no assessment was made for the years 1948-49 and 1949-50. In the course of the assessments before the assessment year 1948-49 in the status of the assessee as a non-resident Hindu undivided family the previous year adopted by the assessee was the appropriate Diwali year. In the first assessment year 1950-51, after the amendment of the definition of "Taxable territories" in 1950, the assessee claimed that in respect of its income by way of commission from the managing and selling agency of the Binod Mills Ltd., Ujjain, its previous year was one ending on 31st March 1950; and that on this basis the managing and selling agency commission which accrued to the assessee for the calendar year 1949 on 31st December 1949 or 1st January 1950 was taxable and not the managing and selling agency commission for the calendar year 1948. This contention of the assessee was overruled by the Appellate Tribunal and the taxing authorities, who took the view that the case of the assessee did not fall under the substantive provision contained in section 2(11) of the Act, and that as the assessee-family had 'once been assessed' in the previous assessment year in respect of this source, therefore, it was not open to it to vary the previous year. Accordingly the family was assessed by the Income-Tax Officer on the basis of Diwali year beginning from 2nd November 1948 and ending on 21st October 1949 as the account year, which included managing and selling agency commission for the calendar year 1948 which accrued to the assessee on 31st December 1948 or 1st January 1949. In the account year in question the assessee derived net dividend income of Rs. 2,62,860 from the Binod Mills Ltd., Ujjain, a company registered in a Part B State viz. former Madhya Bharat. Out of this income Rs. 34,468 were without any dispute taken as attributable to profits that accrued or that could be deemed to have accrued to the Binod Mills Ltd., Ujjain, in Part A States and the remaining amount of Rs. 2,28,392 was regarded as attributable to profits which accrued to the Dividend Paying Company in Part B States. As the dividend income attributable to profits accruing in Part A States was subjected to tax, the Income Tax Officer grossed up the net dividend of Rs. 34,468 to Rs. 2,28,392 was regarded as attributable to profits which accrued to the Dividend Paying Company in Part B States. As the dividend income attributable to profits accruing in Part A States was subjected to tax, the Income Tax Officer grossed up the net dividend of Rs. 34,468 to Rs. 50,137. This income was subjected to income-tax as well as super tax at the rates prescribed by the Finance Act, 1950, rejecting the claim of the assessee for concession in regard to this income under the Part B States (Taxation Concessions) Order, 1950. The balance of Rs. 2,28,392 was, however, not subjected to any income-tax in view of the provisions contained in paragraph 12 of the Taxation Concessions Order, 1950. It was, however, subjected to super tax at the concessional rates mentioned in the said Order. The Tribunal rejected the contentions of the assessee that the dividend income of Rs. 2,28,392 was not subject to super tax under paragraph 12 of the Taxation Concessions Order, 1950; that the amount of Rs. 2,62,860 should not have been apportioned as the Income Tax Officer had done and on this amount income-tax as well as super tax could be levied only at the Part B States concessional rates; and that in any case super tax payable on the entire dividend income of Rs. 2,62,860 only at the concessional rates. The Appellate Tribunal's conclusion about the assessee's previous year being the Diwali year ending on 21st October 1949 in respect of the managing and selling agency commission and the assessee not being allowed to vary it so as to adopt for this source the financial year ending on 31st March 1950, was based on the reasoning that in the assessment years before 1948, that is to say, even before 1st April 1950, the assessee was assessed in respect of the managing and selling agency commission on the footing of the Diwali year inasmuch as though the commission income from non-taxable territory was not included in its total income or total taxable income it was included in the total world income for determining the rate of tax applicable to it; that the assessee had thus already exercised its option in the matter of selection of the previous year; and that, therefore, the assessee could not be allowed either under the proviso to clause (a) of section 2(11)(i) or the substantive clause (a) to vary the previous year. A similar question came up for our decision in The Commissioner of Income-Tax v. Lady Kanchanbai 1961 MPLJ 96 (M.C.C. No. 291 of 1958). In that case the Appellate Tribunal, Delhi, rejected the construction of the expression "an assessee has once been assessed" occurring in the proviso to clause (a) of section 2(11)(i) which the Appellate Tribunal, Bombay, has adopted in the present case. In the Commissioner of Income-Tax v. Lady Kanchanbai 1961 MPLJ 96 (M.C.C. No. 291 of 1958) we have expressed the opinion that the expression "where an assessee has once been assessed in respect of a particular source of income, profits and gains" means where the income, profits and gains of a particular source has been computed in the manner laid down in the Act and included in the total income, and that an assessee could not be said to have been assessed for the purposes of the proviso if his income from a source of income in non-taxable territory was included in the earlier account years for the purpose of determining his total world income and the average rate of tax applicable to the total world income. It must, therefore, be similarly held in the present case that the assessee could not be said to have been previously assessed within the meaning of the expression "has once been assessed" as used in the proviso to section 2(11)(i)(a) merely because its managing and selling agency commission income was included in its total world income for determining the rate of tax applicable to it in the assessment year before 1948. The additional reason given by the Tribunal here for rejecting the assessee's claim with regard to the selection of the financial year ending on 31st March 1950 as the previous year in respect of the managing and selling agency commission was that the assessee had already exercised its option and chosen the Diwali year. The orders of the Tribunal and of the taxing authorities do not, however, give any indication as to the acts of the assessee on the basis of which it can be concluded that there has been an exercise of option. The orders of the Tribunal and of the taxing authorities do not, however, give any indication as to the acts of the assessee on the basis of which it can be concluded that there has been an exercise of option. It is plain from the language of section 2(11)(i)(a) that the exercise of option in the matter of selection of the previous year must be in respect of a particular source of income, profits and gains for the purpose of assessment as understood in the sense indicated earlier. The requisites essential to option or election are well settled. For the validity of an option, it is essential that the party opting should be cognizant of his rights. The party must have the knowledge of his or her right to opt and of those circumstances which would influence the exercise of an option. In Bisheshwar Singh v. Commissioner of Income-tax (1955) 27 ITR 376 , the Patna High Court has gone to the extent of saying that for the exercise of an option under section 2(11)(c) the assessee is bound to make some statement before the Income-tax authorities to show that he had applied his mind and that he had exercised the option given to him. Even if it is held that such an express statement is not essential, there can be no doubt that the exercise of option must be demonstrably plain either by express or implied act involving the utter improbability of the party adopting the other choice open to it. Here, the assessee did not make any statement before the income-tax authorities about the exercise of option. Its accounts were no doubt made on the footing of the Diwali year ending on 21st October 1949. But that by itself is not a circumstance conclusive of the exercise of option, under section 2(11)(i)(a). The account year is normally one ending on 31st March of the year in which the income is earned. The option is with the assessee to adopt any other period of account not terminating with 31st March. But that by itself is not a circumstance conclusive of the exercise of option, under section 2(11)(i)(a). The account year is normally one ending on 31st March of the year in which the income is earned. The option is with the assessee to adopt any other period of account not terminating with 31st March. The fact that under clause (a) the assessee cannot adopt any other period unless his accounts have been made up to that date on which under his system of account year ends does not mean that if the assessee has made up his accounts on a date not terminating with 31st March he has exercised the option given to him under clause (a). The option can be exercised in any case until the filing of the return, and under section 22(3) the assessee has the liberty to furnish a revised return at any time before the assessment is made if he discovers any omission or wrong statement therein. The fact that the assessments before 1948 were made on the basis of Diwali year as the previous year and in those years of account the managing and selling agency commission was included in the total world income for purposes of rate cannot in any sense be regarded as an indication of the fact that the assessee has exercised his option and adopted the Diwali year as the year of account in respect of the managing and ceiling agency source of income for the purpose of its assessment to tax. In the assessment years before 1948 when the managing and selling agency commission accruing in non-taxable territories was not taxable, the assessee could not have contemplated the necessity for exercising the option in the matter of the previous year with reference to the assessibility to tax of income from this source. The circumstances which came into being after the amendment of the definition of "taxable territories" in 1950 did not exist in 1948 or in the earlier years and it is impossible to bold that the assessee was cognizant of its rights and of those circumstances influencing the exercise of the option when the income from the managing and selling agency source became taxable after 1st April 1950. Our answer to the first question is, therefore that in respect of the managing and selling agency source of income the previous year chosen by the assessee is the year ending on 31st March 1950. The second question was not pressed by Shri Chitale, learned counsel appearing for the assessee. It is, therefore, unnecessary to express any opinion thereon. The third question is answered fully by the opinion expressed by us in Smt. Anup Prabha Bai v. The Commissioner of Income-tax 1961 MPLJ 93 (M.C.C. No. 119 of 1959), where a similar question arose for consideration. In that case, after analysing the material provisions of the Income-tax Act and paragraph 12 of the Taxation Concessions Order, 1950, we expressed the following view- So that if a part of the profits of a company registered in a State in which there was no State law are liable to be taxed in the taxable territories other than a Part B State, the concession would nonetheless apply if in that Part B State the profits were not liable to be taxed. The amount of net dividend paid out of the profits which have been taxed in the taxable territories other than Part B State may be grossed up under section 16(2) of the Act before its inclusion in the assesee's total income. But if the share-holder is an assesses falling under paragraph 4 the tax payable on the entire dividend income included in the total income after excluding the proportion of non-taxable dividend under paragraph 12 would be at the concessional rates under the Taxation Concessions Order, 1960. This position is obvious from the provisions of paragraphs 4, 5 and 6 of the Order is not disputed by the learned counsel for the assessee and the learned Advocate-General appearing for the department. We also pointed out in the case of Anup Prabha Bai 1961 MPLJ 93 (M.C.C. No. 119 of 1959) that the concession given by paragraph 12 of the Taxation Concessions Order, 1950, was confined to income-tax and did not apply to super-tax and that the assessee in that case (who was similarly placed as the assessee here in so far as the income from dividends was concerned), was liable to pay super-tax at the concessional rates mentioned in the Taxation Concessions Order, 1950. For these reasons, our answer to the first question is that the previous year in respect of the managing and selling agency source of income is the financial year ending on 31st March 1950 as chosen by the assessee. With regard to the third question, the answer is that the tax payable on the entire dividend income included in the total income after excluding the proportion of non-taxable dividend under paragraph 12 of the Taxation Concessions Order, 1950, would be at the concessional rates under the said Order and the assessee is liable to pay super-tax at the concessional rates mentioned in the Taxation Concessions Order, 1950, on the entire dividend income. The assessee shall have costs of this reference. Counsel's fee is fixed at Rs. 250.