Judgment Jawahar Lal Gupta, J. 1. The Tribunal has referred the following question for the opinion of this court in respect of the assessment years 1988-89 and 1991-92 : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in allowing change in system of accounting of interest income only from mercantile to hybrid system of accounting, whereby interest income is to be shown on receipt basis and interest payment on accrual basis ?" 2. A few facts as relevant for the decision of this question, may be noticed. 3. The assessee is the State Industrial Development Corporation. Its object is to promote industrialisation in the State of Punjab by giving financial aid to various entrepreneurs. For this purpose, it takes loans from the State Government and other organisations. It gives loans to different persons for achieving the declared objective of industrialisation. Up to the year 1987-88, the assessee was following the mercantile system of accounting. With effect from 1988-89, it switched over to a hybrid system of accounting in respect of interest income. On this basis, the assessee claims that even though an amount of Rs. 1,72,04,280 has accrued as income by way of interest, but since the amount has not been recovered, it was not credited to the interest account. In respect of the assessment year 1991-92, the amount was Rs. 6,39,727. 4. The Assessing Officer did not accept the assessees claim regarding change in the method of accounting and made the additions of the aforesaid amounts to the income of the assessee in respect of the two assessment years. The assessee filed an appeal. It was accepted by the Commissioner. The Revenues appeal was dismissed by the Tribunal vide order dated June 11, 1996. 5. In pursuance of the directions given by the High Court in I. T. C. Nos. 33 and 70 of 1997, the Tribunal has referred the aforesaid question to this court. 6. Mr. R.P. Sawhney, learned counsel for the Revenue, contends that the view taken by the Tribunal is not in conformity with the provision of Section 145 as it existed at the relevant time. Is it so ? 7. A perusal of Section 145 shows that the income could be computed "in accordance with the method of accounting regularly employed by the assessee". Is it so ? 7. A perusal of Section 145 shows that the income could be computed "in accordance with the method of accounting regularly employed by the assessee". In the present case, we find that the assessee had adopted the mercantile system of accounting in respect of its liability on account of interest. So far as the receipts are concerned, the assessee had adopted the cash system. Resultantly, the interest which had accrued but was not recovered from the loanees was not added to the income by the assessee. The assessee had explained that it was being burdened with liability to pay tax even though "it was not realising interest in time" from the loanees. Faced with the situation, the assessee had looked for a solution. It had engaged S.B. Billimoria and Company, the chartered accountants, to examine the matter and to suggest as to how the procedure could be streamlined. It was on receipt of the advice that the assessee had switched over to the hybrid system of accounting. 8. The matter has been considered by the Tribunal at length. It has been found that the method adopted by the assessee "was a legitimate and bona fide need of accounting . . ." It has been further found that "there was no mala fide intention . . .". Nothing has been pointed out to show that these findings are not correct. 9. It is undoubtedly correct that the statute stipulates that the income shall be computed on the basis of the system of accounting "regularly" followed by the assessee. It should mean during the period under consideration. However, the provision cannot be interpreted to mean that once a system of accounting is adopted, it can never be changed. "Regular" cannot in the present context cannot mean permanent. It has not been pointed out with reference to any provision that a change is impermissible or barred even when it is warranted by the existing situation. 10. We cannot also lose sight of the fact that the assessee is a Government company. It has adopted a procedure after thorough examination of the matter. This procedure is not violative of Section 145 of the Act. The view taken by the Tribunal is a possible view. 11. The question is, accordingly, answered against the Revenue. No costs.