JUDGMENT

FAZL ALI, J.:— These appeals are by Income-tax Officer, A Ward, Indore, against the judgment of the Madhya Pradesh High Court and involve a question of law regarding the interpretation of Section 220 sub-sections (2) and (3) of the Income-tax Act. 1961. In order to understand the scope and ambit of the question involved, it may be necessary to mention a few facts leading to these appeals.

2. The respondent firm carries on the business of manufacturing cloth. In 1947 the then Maharaja of Gwalior granted to the firm exemption from tax for a period of twelve years form the date when the firm started its factories. Under the Part B States (Taxation Concession) Order, 1950 the Commissioner of Income-tax of the region concerned approved of the exemption only to the weaving division of the respondent for ten years, but deferred decision regarding the staple fibre division until the factory started functioning in 1954. The Commissioner was approached again for granting exemption but he refused to do so. The respondent thereafter moved the High Court of Madhya Pradesh for canceling the order of the Commissioner refusing exemption. The writ petition before the High Court succeeded