Summarize the following court judgment. Civil Appeal No. 466 of 1960. Appeal from the judgment and order dated October 31	 1958 of the Kerala High Court in I. T. R. No. 2 of 1956 (K). K. N. Rajagopal Sastri and P. D. Menon	 for appellant. The respondent did not appear. January 16. The Judgment of the Court was delivered by HIDAYATULLAH	 J. The Commissioner of Income Tax	 Kerala and Coimbatore	 has filed this appeal against the judgment and order of the High Court of Kerala dated October 31	 1958	 by which the High Court answered in favour of the respondent (Helen Rubber Industries	 Ltd.	 Kottayam) the following question: "Whether under the provisions of the Indian Income tax Act the petitioner is entitled to carry forward the loss for a period of six years notwithstanding the fact that during the period when the loss had occurred	 the law applicable was the Travancore Income tax Act ?" The High Court has granted a certificate under section 66A(2) of the Income tax Act. Two questions were referred to the High Court in compliance with an earlier order of the High Court under section 66(2); 607 but with the other question	 we are not concerned in this appeal. Messrs. Helen Rubber Industries	 Ltd. is a Company	 which was incorporated in the former State of Travancore with its registered office at Kottayam. In the year 1941	 the assessee Company granted a lease of the factory to certain persons for a period of 15 years. From that year	 the rent and royalty received from the lessees were the only source of income. Disputes having arisen	 the lessees suspended payment from June 1946. Litigation followed; but the dispute was settled by the assessee Company receiving Rs. 23	000/ odd in full satisfaction. With the details of these disputes and their settlement	 we are not concerned. The year of account of the assessee Company is the Calendar year. Before the extension of the Indian Income tax Act	 there was in force in Travancore State	 the Travancore Income tax Act	 1121 M. E. (Act XXIII of 1121 M. E.)	 which came into force on the first day of Chingom 1122 M. E. (August 17	 1946). The assessment year under the Travancore Act ended on the last day of Karkadakom	 which corresponds to August 16	 1947. Thus for the account year	 1 1 1946 to 31 12 1946 of the firm the assessment year was 1123 M. E. (17 8 1947 to 16 8 1948). The assessee Company declared losses in the account years	 1946	 1947 and 1948. These losses	 together with the dates of the account years and the assessment years are tabulated below: Year of account Year of assessment. Loss 1946(1 1 1946 to 1123 M. E. (17 8 1947 Rs. 4031 10 0 31 12 1946) to 16 8 1948) 1947(1 1 1947 to 1124 M. E.(17 8 1948 Rs. 6605 1 6 31 12 1947) to 16 8 1949) 1948 (1 1 1948 to 1125 M. E. (17 8 1949 Rs. 2604 13 9 31 12 1948) to 16 8 1950) Total Rs. 13241 9 3 608 The dispute in this case is about the right of the assessee Company to carry forward the loss of the year 1946 under the provisions of the Travancore Act read with section 24(2) of the Indian Income tax Act and the Taxation Laws (Part B States) (Removal of Difficulties) Order	 1950 to the assessment year	 1951 52	 in the assessment of the Company for its year of account	 the Calendar Year	 1950. The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year	 since it had lapsed after two years under section 32 of the Travancore Act	 and section 24(2) was not applicable	 in view of paragraph 3 of the Order	 mentioned above. The order of the Income tax Officer was confirmed in appeal by the Appellate Assistant Commissioner and the Appellate Tribunal. The Tribunal was moved for a case	 but declined to state one; but the High Court called for a statement of the case under section 66(2) and the above mentioned question was decided in favour of the assessee Company. The only question argued in this appeal is whether the High Court was right in the answer it gave. The assessee Company was not represented at the hearing before this Court. The Indian Income tax Act was extended to Travancore Cochin by section 3 of the Indian Finance Act	 1950. By section 13(1) of the same Act	 it was provided: "If immediately before the 1st day of April	 1950	 there is in force in any part B State. any law relating to income tax that law shall cease to have effect except for the purposes of the levy	 assessment and collection of income tax. . in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act	 1922 (XI of 1922)	 for the year ending on the 31st day of March	 1951	 or for any subsequent year. " 609 By this section a clear division was made between the operation of the prior law and the Indian Income tax Act. The assessment for the year	 1951 52	 was thus made on the assessee Company under the Indian Income tax Act. Under section 24(2) of the Indian Income tax Act	 as it existed prior to its amendment by the Finance Act	 1955	 it was provided: "Where any assessee sustains a loss of profits or gains in any year	 being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March 1940	 under the head 'Profits and gains of business	 profession or vocation ' and the loss cannot be wholly set off under sub section(1)	 the portion not so set off shall be carried forward to the following year	 and so on	 but no loss shall be so carried forward for more than six years	 and a loss arising in the previous years for the assessment for "the years ending on the 31st day of March	 1940	 the 31st day of March	 1941	 the 31st day of March	 1942	 the 31st day of March	 1943	 and the 31st day of March 1944 respectively shall be carried forward only for one	 two	 three	 four and five years respectively. " Since we are concerned with the loss for the year	 which does not correspond to the years named in the latter part of the section above quoted	 that part of the section does not apply to the assessee Company 's case. What was thus claimed was the benefit of the earlier part	 where the loss was allowed to be carried forward for six years. This position taken by the assessee Company can hardly be considered in view of the provisions of section 32 of the Travancore Act	 read with the Removal of Difficulties Order passed in 1950. Section 32 of the Travancore Act was a reproduction of the Indian section 24(2) except for a change of the 610 dates mentioned therein	 due obviously to the fact that the Travancore Act came into force on the first day of Chingom	 1122 M. E. (August	 17	 1946). It is enough to point out that instead of "31st March"	 wherever they occurred	 the words "the last day of Karkadakom" (August	 16) were substituted	 and instead of the years	 1940	 1941	 1942	 1943 and 1944	 were substituted the Malayalam years	 1122 (17 8 1946 to 16 8 1947)	 1123 (17 8 1947 to 16 8 1948)	 1124 (17 8 1948 to 16 8 1949)	 1125 (17 8 1949 to 16 8 1950)	 and 1126 (17 8 1950 to 16 8 1951). These were the only differences between the two sections	 and section 24(2) of the Indian Income tax Act	 so modified	 can be read as section 32 of the Travancore Act. The existance of these two sections in the two Acts was likely to lead to some difficulty	 and a question was likely to arise which law was to prevail. Section 12 of the Indian Finance Act	 1950	 therefore	 enabled the Central Government to pass an Order removing any such difficulty. The Taxation Laws (Part B States) (Removal of Difficulties) Order	 1950 was thus passed. Paragraph 3 of that order provided: "3. Carry forward and set off of previous losses where in any previous year prior to the previous year for "the assessment for the year ending on the 31st day of March 1950	 an assessee has sustained a loss of profits or gains in any business	 profession or vocation carried on by him	 and such loss would	 had the State law continued to be in force	 have been set off against the profits and gains	 if any	 from the same business chargeable to tax in the said year of assessment or in any year subsequent thereto	 such loss would be so set off in the same manner	 to the same extent	 and up to the same year of assessment as it would have been set off had the State law continued to be in force. " 611 The critical words are those contained in the later part	 namely	 "in the same manner	 to the same extent	 and up to the same year of assessment	 as it would have been set off had the State law continued to be in force". They show that the law to apply to the loss of "any previous year prior to the previous year for the assessment for the year ending on the 31st day of March	 1950" was the law in force in a Part B State here	 the Travancore Act. Now	 taking the case of the assessee Company	 we shall indicate which previous year or years would be governed by the Travancore Act. The previous year of the assessee Company for the assessment year ending 31st day of March 1950 would be the Calendar year	 1 1 1949 to 31 12 1949. To that	 the Indian Income tax Act would apply. The application of the Travancore Act by para 3 of the order was limited to the previous year before 1 1 1949 and other earlier previous years. The previous year	 with which we are concerned	 1 1 1946 to 31 12 1946	 is so clearly a previous year	 to which the Travancore Act applies. that it does not admit of any doubt or difference. The matter is thus governed by the Travancore Act. The Travancore Act laid down	 inter alia	 that a loss arising in the previous year for the assessment for the year ending on the last day of Karkadakom	 1123	 could be carried forward for two years. The assessment year for 1123	 M.E. covered the period	 17 8 1947 to 16 8 1948	 and the previous year of the assessee Company relative to that assessment year was 1 1 1946 to 31 12 1946. The loss of the Calendar year	 1946 could be carried forward to the Calendar years	 1947 and 1948 and given effect to	 till the assessment year	 1125 (17 8 1949 to 16 8 1950). The assessment year	 1 4 1951 to 31 3 1952	 corresponded to the account year of the assessee Company	 1 1 1950 to 31 12 1950	 and that is beyond two years	 whether one takes 612 the account year or the assessment year as the basis of the calculation of two years. The High Court	 with all due respect	 was not right in thinking that the Removal of Difficulties Order	 1950 was meant to enlarge the rights of the new assessees brought within the reach of the Indian Income tax law. The intention of the law was to make a dividing line between those previous years to which the provisions of the earlier law would apply	 and those previous years to which the provisions of the Indian Income tax Act would apply. The rights were neither enlarged nor curtailed. As pointed out by Chagla	 C.J. in the Indore Malwa United Mills Ltd. vs Commissioner of Income tax (1). "the only right integration has given to an assessee is the right contained in clauses (sic) 3 of the (Removal of Difficulties) Order	 1950 and that right is that if the law of his own State permitted him to carry forward the losses	 then that right is preserved under the Indian Income tax Act. " paragraph 3 of the Order clearly said that the right was available in the same manner	 to the same extent and up to the year of assessment	 as laid down in the State law (here	 the Travancore Act). Since in this case	 the carry forward of the loss was for only two years and those years were before the previous year from which the Indian Income tax Act began to apply	 there is no question of the application of the Indian Income tax Act. The appeal thus succeeds	 and is allowed. The assessee Company shall pay the costs of the appeal in the High Court	 but there shall be no order about costs in this Court. Appeal allowed.

The respondent company was incorporated in the former State of Travancore. The dispute was about the right of the respondent assessee company to carry forward the loss of the years 1946 under the provisions of the Travancore Act read with section 24 (2) of the Indian Income tax Act and the Taxation laws (Part B States)(Removal of Difficulties) Order	 1950	 to the assessment year 1951 52 in the assessment of the company for its year of account. The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year	 since it had lapsed after two years under section 32 of the Travancore Act and section 24 (2) was not applicable	 in view of para 3 of the order. ^ Held	 that the Taxation laws (Part B State) (Removal of Difficulties) Order	 1950	 passed under section 12 of the Indian 606 Finance Act	 1950	 was not intended to make a dividing line between those previous years to which the provisions of the earlier law would apply	 and those previous years to which the provisions of the Income tax Act would apply. The rights were neither enlarged or curtailed by para 3 of the order. That paragraph said that the right was available in the same manner	 to the same extent and upto the same year of assessment as laid down in the State law. The law to apply was thus the State law and the carry forward could only be for two years. Indore Malwa United Mills Ltd. vs Commissioner of Income tax	 (1959) 35 I. T. R. 271	 approved.