DIPAK KUMAR SEN, J.

( 1 ) IN this reference under Section 256 (2) of the Income-tax Act, 1961, at the instance of the assessee, viz. , Messrs. Sun Engineering Works (P.) Ltd. , the assessment years involved are 1960-61 and 1961-62. The facts which have been found or are admitted may be shortly stated as follows: for the assessment year 1960-61, the assessee filed its return of income on the 17th November, 1962, showing a loss of Rs. 36,418. Similarly, for the assessment year 1961-62, the return of its income was filed on the 4th October, 1961, again declaring a loss of Rs. 24,314. The assessment proceedings were disposed of by the Income-tax Officer concerned on the 12th December, 1962, in the following manner : for the assessment year 1960-61 an order was made in the following language: "the loss return filed on 17th November, 1960, is discussed with the A/r Sri A. B. Chowdhury. The return filed is beyond time. No action is necessary ; filed N. D. "

( 2 ) FOR the assessment year 1961-62 the order recorded was as follows : "v. O. S. for 1962-63. The return filed on 4th January, 1962, is discussed with Sri A. B. Chowdhury. The loss return is beyond time. Filed as N. D. "

( 3 ) ON the same day the Income-tax Officer concerned addressed a letter to the princial officer of the assessee as follows :"sub : Assessment years 1960-61 and 1961-62. With reference to above and your authorised representative's discussion with me I am to inform you that the loss returns submitted beyond time for the assessment years under reference being invalid, no action on them is necessary. Hence, the proceedings for both these years are filed. "

( 4 ) BEING aggrieved by the said orders of the Income-tax Officer the asses-see preferred an appeal therefrom to the Appellate Assistant Commissioner. In disposing of the appeal, the Appellate Assistant Commissioner held that the Income-tax Officer was wrong in filing the returns filed by the assessee in response to notices under Section 22 (2) of the Indian Income-tax Act, 1922. Even if the said returns were filed under Section 22 (2a) of the said Act the same should not have been filed without proper scrutiny and without first computing the loss in accordance with law. It was only after a computation it was possible to know whether the assessment would result in a loss. The appeals were disallowed, as being infructuous, only on the ground that no appeal lay against the action of the Income-tax Officer in filing the returns in the manner he had done.

( 5 ) THE assessee did not prefer any further appeal from this order of the Appellate Assistant Commissioner.

( 6 ) SUBSEQUENTLY, the assessee filed a disclosure petition in respect of some hundi loans and a settlement was arrived at between the assessee and the revenue as a result whereof the assessee became assessable for a sum of Rs. 27,000 for the assessment year 1960-61 and Rs. 9,000 in the subsequent assessment year 1961-62. The Income-tax Officer re-opened the assessments for the said two years under Section 147 (1) of the Income-tax Act, 1961, and completed the assessments afresh on a total income of Rs. 27,000 and Rs. 9,000 respectively.

( 7 ) AGAINST these reassessments the assessee went up on appeal and succeeded. The Appellate Assistant Commissioner held that the Income-tax Officer should redetermine the loss and set it off against the income from other sources and, if necessary, carry forward the loss to the subsequent assessment year. He also directed that the unabsorbed loss, if any, should be carried forward and set off against the income of the subsequent years.

( 8 ) AGGRIEVED by this order of the Appellate Assistant Commissioner the revenue went up on further appeal before the Income-tax Appellate Tribunal. It was contended by the revenue before the Tribunal that as the returns originally filed by the assessee were out of time and the Income-tax Officer had treated such returns as invalid and had made the assessments without determining th

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