Chakravaktti, C.J. - (1.) On the 4th September, 1951, one Govindalal Dutta, an owner of a tea business, filed voluntary returns of his income in respect of five consecutive years. Those were assessment years 1946-47 to 1950-51. Of the returns so filed, that for the assessment year 1946-47 showed a loss of Rs. 37.925-2-9 and that for 1947-48 snowed a loss of Rs. 36,033-15-0, while that for the year 1948-49 showed a paltry profit of Rs. 75-3-3. In making assessments on these returns, the Income-tax Officer paid no attention to the returns for 1946-47 and 1947-48. The first return to be dealt with was the return for the year 1948-49 and on that return he made an assessment on an income of Rs. 5,545/-.
(2.) It does not appear from the Income-tax Officer's order that he was asked to take into account the losses of the earlier years and set them off against the profits for the assessment year 1948-49, if he found that losses incurred in earlier years had been made out. In the assessee's appeal to the appellate Assistant Commissioner, however, a specific ground relating to the question was taken. Ground No. 4 was that the Income-tax Officer ought to have carried forward the losses for the two earlier years, that is to say, the accounting years 1945 and 1946 respectively, against the profits of 1948-49. Though that ground was taken, there was no oral argument in its support at the time of the hearing, because the pleader who appeared for the assessee withdrew from the case after his prayer for an adjournment had been refused. It appears that the adjournment was asked for on the ground that notice of the hearing had been received by the appellant only two days earlier, but it occurred to the Appellate Assistant Commissioner to call for the envelope in which the notice served on the assessee had been enclosed and when the envelope was produced, it was found that in fact the notice had been served much earlier. In those circumstances, the Appellate Assistant Commissioner was not disposed to grant the adjournment prayed for and the result was that the pleader withdrew from the case.
(3.) The Appellate Assistant Commissioner disposed of the fourth ground taken on behalf of the assessee shortly. He held that no claim of any earlier loss had been made in the return and, therefore, the action of the Income-tax Officer in not engaging himself in any enquiry about earlier losses had been perfectly in order. The statement of the Appellate Tribunal that the Appellate Assistant Commissioner did not decide this contention of the assessee, as remarked by them in the appellate order, or that he rejected the assessee's appeal "without going into this point", as observed in the Statement of the Case, is correct only to the extent that the Appellate Assistant Commissioner did not deal with the contention on its merits.;