( 1 ) THIS petition under Articles 226 and 227 of the Constitution is directed against an order dated 27 May, 1961 by which the Appellate Assistant Commissioner, indore, rectified under Section 35 of the Indian Income-tax Act, 1922 (hereinafter called the Act), an order of his predecessor-in-office dated 29th May, 1957. By the impugned order, the losses allowed to be carried forward and set off were restricted to those incurred in the taxable territories. In this manner, the losses for the assessment year 194849 carried forward and set off were reduced from Rs. 78,123/-to Rs. 1,075/- and those for the assessment year 1949-50 were similarly reduced from Rs. 3,762/- to Rs. 123/ -.

( 2 ) IN the assessment years 194849 and 1949-50, the petitioner, who was assessed as -a non-resident, incurred losses, for the most part in the native State of Indore, to the extent of Rs. 78,123/- and Rs. 3,762/-respectively in the life insurance business carried on by it. From 1 December 1949, the petitioner started the business of insurance against fire also. In the proceedings for the assessment year 1950-51, the petitioner claimed inter alia Rs. 20,385/- as a revenue deduction, being the am