RAMACHANDRA IYER, J.

The following two questions have been referred to us under section 66(2) of the Indian Income-tax Act

" (1) Whether on the facts and in the circumstances of this case, the Appellate Tribunal having dismissed the appeal by the Department had jurisdiction to set aside the assessment on the petitioner as an individual and direct a fresh assessment; and

(2) Whether on the facts and in the circumstances of this case, the Appellate Tribunal was right in deciding the appeal on the basis of an irregularity in the assessment while the said irregularity was not specifically taken in the grounds of appeal. " *

The following facts are necessary to be mentioned in answering the questions aforesaid. The assessee is a Nattukottai Chettiar. He and his nephew, Ramaswami Chettiar, formed members of a Hindu undivided family. Ramaswami Chettiar was congenitally blind. He executed a release deed in favour of the assessee in the year 1935, admitting his disqualification. The family owned (1) properties, (2) a money lending business at Karaikudi, with a branch in Penang, the vilasam being M.R.M.M., (3) a share in a partnership firm at Talukanson and (4) certain shares in companies. Besides his interest in the family properties, the assessee owned, in his own individual right, (1) a business in stocks and shares, (2) an interest as a partner in a Hundial shop M.R.M.S., which had its head office at Karaikudi and a branch at Penang, and (3) some shares in certain companies. The assessee had been assessed to income-tax in two capacities: (1) as the karta of a Hindu undivided family with respect to the income from family properties and (2) as an individual in respect of the income from his separate property. Ramaswami Chetiar died on March 12, 1948. For the assessment year 1948-49 (the account year being April 13, 1947, to April 12, 1948), the assessee submitted two returns, one on behalf of the family and the other for himself. He, however, claimed that after March 12, 1948, he should be assessed only as an individual on all the sources of income. The Income-tax Officer accepted the assessee's claim, and proceeded to club the two returns and assessed him is an individual for the year 1948-49. The Officer computed the income for the year at Rs. 4, 31, 840. In so doing, he included a sum of Rs. 3, 19, 162 as a constructive remittance of foreign profits, as having been received in India on February 5, 1948. The reason why that sum was treated as a constructive remittance requires an explanation. The assessee required large sums of money for his business in stocks and shares. The Penang branch of M.R.M.S. Hundial shop, of which he was a partner, raised monies from certain individuals in Penang and remitted the same to its head office in India, from whence the assessee took them over. The Penang business of M.R.M.S. Hundial shop had a liability to its creditors and a credit with its head office. In 1942, the branch of the Hundial shop at Penang was closed, and there was then a credit in its favour in the accounts of the head office at Karaikudi to the extent of nearly $4, 00, 000. The assets and liabilities of that branch were taken over by the joint family firm of the assessee M.R.M.M. at Penang. The nett liabilities taken over were $4, 01, 041, which stood debited in the assessee's books at Penang as against M.R.M.S. at Penang. As stated already, there was a credit in favour of the Penang branch in the books of the head office at Karaikudi for nearly that sum. On March 5, 1948, the assessee family firm M.R.M.M. wrote off the debit balance of $4, 01, 041 which stood against M.R.M.S. Penang, for no valid reason, according to the Department, as there was an asset of very nearly that amount in the head office of M.R.M.S. The amount thus written off was, therefore, treated as a remittance in India, and was held to have been constructively received by the assessee. The amount of remittance was ascertained at the then prevailing exc