Summarize the following court judgment. Appeal No. 172 of 1955. Appeal by special leave from the judgment and order dated February 26	 1953	 of the Bombay High Court in Appeal No. 108 of 1952	 arising out ' of the Judgment and order dated July 8	 1952	 of the said High Court in its Ordinary Original and Civil Jurisdiction in Misc. No. 48 of 1952. R. J. Kolah	 J. B. Dadachanji	 section N. Andley and Rameshwar Nath	 for the appellant. H. N. Sanyal	 Additional Solicitor General of India	K. N. Rajagopal Sastri and D. Gupta	 for the respondents. May 5. The Judgment of the Court was delivered by HIDAYATULLAH	 J. This appeal	 by special leave of this Court	 is directed against the judgment and order of the High Court of Judicature at Bombay dated February 26	 1953	 in Appeal No. 108 of 1952. By that judgment	 the Divisional Bench (Chagla	 C. J. and Shah	 J.) declined to interfere	 in Letters Patent Appeal	 with the judgment of Tendolkar	 J.	 dated July 8	 1952	 in Miscellaneous Application No. 48 of 1952. In the petition which was originally filed in the High Court under article 226 of the Constitution	 a writ of mandamus was asked against the Union of India and two Income tax Officers to compel them to give effect to the appellate order of the Appellate Assistant Commissioner of I. T. F. Range	 Bombay	 dated April 29	 1949. The High Court in both the judgments declined the writ. The facts of the case are as follows: The appellant	 Messrs. Sarupchand arid Hukamehand and Co.	 (hereinafter referred to as the assessee firm) was carrying on business	 inter alia	 as shroffs	 merchants and 989 commission agents at Bombay	 Indore	 Ujjain and Calcutta. It had	 in the relevant account years	 two partners	 Sir Sarupchand Hukamchand and Sri Hiralal Kalyanmal. The two partners were also separately liable to income tax	 the former as a Hindu undivided family and the latter as an individual. We are concerned here with the assessment years 1940 41	 194142 and 1942 43. These correspond to the account years	 1995 1996 (Samvat) to 1997 1998 (Samvat). When the assessment of the assessee firm was made	 the Income tax Officer	 Section VIII (Central)	 Bombay	 treated the firm as " resident and ordinarily resident ". For the assessment year 1940 41 the Income tax Officer found a profit of Rs. 80	358	 and applying section 23(5)(b) of the Indian Income tax Act (hereafter called the Act)	 he proceeded to treat the firm which was unregistered as registered for the purpose of assessment. On March 15	 1945	 he therefore assessed the two partners carrying the profit into their individual returns and made no demand upon the firm. It appears that an application for registration had already been filed under section 26A of the Act before the Income tax Officer	 but it was rejected and quite correctly because no instrument of partnership was disclosed. That order was also passed on the same date. For the assessment years 1941 42 and 1942 43	 the Income tax Officer by his orders dated July 31	 1945	 and October 31	 1945	 respectively	 treated the firm as " resident and ordinarily resident " and as an unregistered firm. For the first of the two assessment years	 he assessed the firm on a total income of Rs. 2	30	798 to income tax and super tax	 and for the second year	 its British Indian income was taken at Rs. 2	62	827 and the total income at Rs. 7	00	116 and was also treated accordingly. The assessee firm appealed against these assessments. The Appellate Assistant Commissioner by his order passed in the consolidated appeals on April 29	 1949	 held that the assessee firm was non resident and excluded the income of the firm outside British India	 though it was included in the total word income for the purpose of computing the rate of tax. 990 He also found error in the computation of income made by the Income tax Officer	 and held that in the assessment year 1940 41 there was a loss of Rs. 1	61	084 in the total world income of the assessee firm. For the subsequent years also there were slight variations in the amounts determined by the Income tax Officer	 but it was held that the assessee firm had made profits in those years. The following is the summary of the findings of the Appellate Assistant Commissioner	 as given by him in his order: Assess Income in Income Total ment British outside world year India British income. India Rs. Rs. Rs. 1940 41 Loss 2	26	028 74	944Loss 1	61	084 1941 42 1	27	062 1	08	236 2	35	298 1942 43 2	62	827 4	41	789 7	04	616 In addition to these findings	 the Appellate Assistant Commissioner added a direction to the following effect : " The Income tax Officer is directed to modify the assessments accordingly. " When the matter reached the Income tax Officer	 he gave effect to the order of the Appellate Assistant Commissioner under section 31 of the Act and carried the loss to the partners in their assessments for the year 1940 41	 and granted a refund of Rs. 16	977 11 0 to Sir Sarupchand Hukamchand and Rs. 68	339 to Sri Hiralal Kalyanmal. The assessee firm	 however	 was not satisfied	 and embarked upon voluminous correspondence beginning with a letter dated September 10	 1949	 by which it claimed that inasmuch as it had been shown to have incurred a loss in the first of the three assessment years	 it could not for that year be treated as a registered firm	 and that as an unregistered firm it was entitled therefore to carry forward the loss to the subsequent years. In addition to the correspondence	 the assessee firm moved in turn the Income tax Officer 991 as well as the Appellate Assistant Commissioner respectively under section 35 of the Act for rectification of the assessment to the same effect. The officers of the Department at both levels declined to interfere	 and stated that the direction of the Income tax Officer under section 23(5)(b) was not appealable	 and had become final. They also pointed out that the period during which the original order of the Income tax Officer could be rectified (viz.	 4 years) had already run out	 and that the petitions were accordingly out of time. The assessee firm moved the Commissioner as well as the Central Board of Revenue	 but failed to get the desired order. Finally	 after the receipt of the order of the Central Board of Revenue	 the assesee firm applied on July 16	 1951	 to the Additional Income tax Officer	 Section VIII (Central)	 to give effect to an order which the assessee firm had secured from the Appellate Assistant Commissioner earlier. By that order	 the Appellate Assistant Commissioner had	 at the request of the assessee firm	 directed the Income tax Officer to take the losses of the first assessment year into the accounts of the partners	 which direction	 in the opinion of the Appellate Assistant Commissioner	 his predecessor had omitted to make in the first instance. It was after this that fresh assessment forms were drawn up	 and the refund was determined. It may be pointed out here that the partners withdrew the amount of refund	 though in making the request to the Additional Income tax Officer the assessee firm had reserved its right "to move further in the matter as may be advised "	 and had pointed out that the action was without prejudice to such rights. Having failed to obtain relief from the Department	 the appellate authorities and the Central Board of Revenue	 the assessee firm filed the petition under article 226 of the Constitution in the High Court of Judicature at Bombay. That petition was heard by Tendolkar	 J.	 and he declined to interfere mainly on the ground that it was possible to take two views of the matter whether after a profit assessment was turned into a loss assessment by the Appellate Assistant 992 Commissioner	 the original order of the Income tax Officer under section 23(5)(b) remained outstanding or not. He thought that this was not a fit case for the issuance of a writ of mandamus by the High Court. In appeal which was taken from this decision	 Chagla	 C. J.	 looked at proviso (d) to section 24(2)	 and also came to the view that there was a possibility of two views being taken in the matter	 and that the learned single Judge was right in not interfering. Shah	 J.	 in a concurring judgment	 explained what he considered was the meaning of section 23(5)(b) read with section 24(2)	 proviso (d)	 but he also felt that this was not a case in which a Writ could be claimed against the Union of India or the Income tax Officers. Chagla	 C. J.	 however	 expressed the hope that the taxing authorities would not deny the assessee firm its rights under the Act on any technical ground	 such as limitation	 or failure to pursue a particular procedure. In the result	 the Divisional Bench sustained the order of Tendolkar	 J.	 who had dismissed the petition earlier. This Court on May 3	 1954	 granted special leave to appeal against the judgment of the Divisional Bench. Before arguing on merits of the appeal	 the learned Additional Solicitor General and subsequently Mr. Rajagopala Sastri who took over the argument	 raised three objections to the present appeal. According to them	 the petition in the High Court was directed against the Union of India and the two Income tax Officers who had dealt with this matter	 and the relief which was claimed could be granted by none of them. They further argued that mandamus was an inappropriate writ to issue in this matter	 when the order passed by the Income tax Officer under section 23(5)(b) was not appealable and the Appellate Assistant Commissioner could do nothing about it in the appeal against the quantum of assessment. They also stated that the relief asked for in the petition could not be granted by the High Court	 and that the powers of this Court were accordingly limited. We shall deal with these objections	 when we have determined the essence of the matter. Under section 23(5)(b)	 a power is conferred on the Income tax Officer to treat an unregistered firm as a registered 993 firm	 if by adopting that method more tax and supertax would be realisable from the individual partners in their own assessments than in assessing the firm. I The clause may be quoted in extenso for ready reference here : 23(5). " Notwithstanding anything contained in the foregoing sub sections	 when the assessee is a firm and the total income of the firm has been assessed under sub section (1)	 sub section (3) or sub section (4)	 as the case may be	 (b) in the case of an unregistered firm	 the Income tax Officer may instead of determining the sum payable by the firm itself proceed in the manner laid down in clause (a) as applicable to a registered firm	 if	 in his opinion	 the aggregate amount of the tax including super tax	 if any	 payable by the partners under such procedure would be greater than the aggregate amount which would be payable by the firm and the partners individually if the firm were assessed as an unregistered firm. " The contention of the assessee firm is that the action of the Income tax Officer in treating an unregistered firm as a registered firm is mainly in the interests of the Revenue and he can act if more revenue would be available and not otherwise. When an unregistered firm makes a loss	 it is entitled to carry forward the loss for a certain number of years till it is absorbed in the profits	 if any	 of subsequent years. By carrying the loss to the account of the individual partners	 relief is afforded to them in their own income tax payment	 and there is presently a loss of revenue to the State. This	 according to the assessee firm	 is outside the jurisdiction of the Income tax Officer	 because his action is conditioned upon realisation of more revenue and not creating loss for the State. Learned counsel for the Department agree that there would be	 in the assessment year in which there is a loss by an unregistered firm	 a loss to the Revenue if it is carried into the accounts of the partners ; but they contend that there is no inhibition against the 125 994 action and refer to proviso (d) to section 24(2) as indicating that such a course is perfectly valid. The assessee firm also contends that the moment loss was determined by the Appellate Assistant Commissioner	 the previous order made by the Income tax Officer under section 23(5)(b) of the Act automatically fell to the ground and the loss could only be carried forward in the future assessments of the unregistered assessee firm and not in the account of the partners. The assessee firm contends that the direction by the Appellate Assistant Commissioner to modify the assessments of the three years accordingly implied the reopening of the entire question whether this unregistered firm could be treated as a registered firm for purposes of assessment in the first year. The Department	 on the other hand	 refers to the provisions of section 30 of the Act to show that an appeal lies to the Appellate Assistant Commissioner on the grounds expressly mentioned there and none other. It further points out that this is not one of the grounds on which the appeal could have been taken	 and the Act cannot by implication be deemed to have conferred on the Appellate Assistant Commissioner a power which he ordinarily did not possess under the Act. The order of the Income tax Officer to treat the unregistered firm as registered must	 therefore	 be held to be outstanding	 and all that has happened in the case is to take that order to its logical conclusion in the light of the assessed loss of the firm	 in the three years under assessment. This question was argued before us in great detail		 as apparently it had also been in the Court below. There is no doubt that the matter is one of some complexity	 which is not unusual in a statute of the type we are considering	 but	 in our opinion	 only one correct view of the matter was possible	 and with all due	 respect	 the High Court made but little attempt to determine it. We shall now attempt to lay down the interpretation of the various sections bearing upon the matter. Section 23(5)(b) has already been quoted. It will appear from it that the Income tax Officer is given the option to apply the procedure laid down in cl. (a) to an unregistered firm	 if	 in his 995 opinion	 the aggregate amount of tax including supertax	 if any	 payable by the partners under such procedure would be greater than the aggregate amount of tax which would be payable by the firm and the partners individually	 if the firm was assessed as an unregistered firm. Clause (a) provides that the sum payable by the firm shall not be determined but the total income of each partner of the firm	 including therein his share of its income	 profits and gains of the previous year	 shall be assessed and the sum payable by him on the basis of such assessment shall be determined. To put it simply	 in the case of a registered firm its assessable income is first determined	 but is not processed further to determine the tax. Instead	 the shares of the partners in the assessable income are determined in accordance with the particulars furnished by them	 and the resultant amounts are respectively carried to each partner 's return and included in his income	 and the tax on the total is determined. In the case of an unregistered firm	 the assessable income is found out	 and then the tax payable by the unregistered firm is determined and a demand issued. If there is a loss	 then the loss is carried forward to the succeeding years till it is absorbed or for six (now	 eight) years but no further. Previously	 the number of years ranged from one to six	 but there is no need to refer to the provision in detail. What happened in this case was that for the assessment year 1940 41	 the Income tax Officer determined the assessable income at Rs. 80	358. He felt that more tax was likely to be realised if the partners were assessed instead of the firm	 and he accordingly decided to apply the procedure laid down in section 23(5)(b) to the firm. In passing his order	 the Income tax Officer observed as follows: " The firm is an unregistered one but the aggregate amount of tax payable by the partners would be greater by applying the procedure laid down in Sec. 23(5)(a) of the Act than the aggregate amount which would be payable by the firm and the partners individually if the firm were assessed as an unregistered one. I therefore order under Sec. 23(5)(b) of the 996 Act that the procedure laid down in Sec. 23(5)(a) should be applied and the firm declared N. D. for the assessment year 1940 41 ". It is no doubt true that if the Income tax Officer had determined a loss	 he could not and probably would not have passed this order	 which would have had the immediate effect of loss to the Revenue of the sums which have now been ordered to be refunded to the partners of this unregistered firm. The Department	 however	 says that the assessment for 1940 41 except in so far as profit was converted into loss has become final and cannot be set aside now. It relies on Commissioner of Income tax	 Bombay and Aden vs Khemchand Ramdas (1) and Commissioner of Income tax vs Tribune Trust	 Lahore (1). There is no doubt that an assessment which has once been made does become final	 subject only to the powers exercisable under sections 34 and 35 of the Act. The position	 however	 is different when the assessment itself is subject to appeal	 and the Appellate Assistant Commissioner passes an order converting the profit into a loss	 and gives a direction to the Income tax Officer to modify the assessment accordingly. The position then was that the Income tax Officer had exercised his powers under section 23(5)(b) as there was a profit. When the Appellate Assistant Commissioner found a loss it became clear that the Income tax Officer had	 by an erroneous finding of profit assumed jurisdiction to act under section 23(5)(b). The reversal of the finding of profit destroyed the substratum of the jurisdiction of the Income tax Officer to act under that clause and his order automatically fell through. The Department 's contention that such an order is referable to cl. (a) of section 31(3) and does not involve the setting aside of the order under section 23(5)(b) passed earlier by the Income tax Officer is not correct. No doubt	 the right of appeal given to the assessee under section 30 is limited to the matters therein contained	 but the relief which the appellate authority can give is to be found in section 31(3). The assessment order having come before the Appellate Assistant Commissioner	 he (1) (2) 997 can	 under cl. (a)	 confirm	 reduce	 enhance or annul the assessment. Under cl. (b) he can set aside the assessment and direct the Income tax Officer to make a fresh assessment	 after making such further enquiries as the Income tax Officer thinks fit or the Appellate Assistant Commissioner directs	 and the Income tax Officer must thereupon proceed to make fresh assessment and determine the amount of tax payable on the basis of such fresh assessment. It is contended by the Department that the order of the Appellate Assistant Commissioner was passed under cl. (a) and not cl. (b)	 and there being no fresh assessment ordered	 the only thing that the Income tax Officer could do was to redetermine the tax within the limits of his own order under section 23(5)(b) of the Act	 which applied cl. (a) of that sub section to this case. In our opinion	 this is not a correct approach. Even if the order be referred to cl. (a) of section 31(3)	 the effect	 in law	 was the annulment of the assessment which had	 been made in the case	 and the necessary consequence of the determination of the loss in the assessable income remained to be worked out. The Income tax Officer worked it out by carrying the losses to the return of the partners. Under what section could he do so except under section 23(5)(b) ? There was no authorisation under section 31(4) of the Act and the second proviso to section 24 was clear. In such a case	 the Income tax Officer was required once again to apply his mind to determine whether it would be in the interests of Revenue to proceed	 as he had done before. It is manifest that if he had done this duty in the interests of the Revenue	 as the law indeed contemplates	 he would never have passed the order that the loss of the firm should be carried to the accounts of the partners immediately in that year of assessment. Learned counsel for the Department admits that no Income tax Officer would have	 with a loss by the firm	 given relief on the basis of that loss to the partners	 but he contends that this is not illegal in view of the special provisions of proviso (d) to section 24(2) of the Act. We accordingly proceed to consider the effect of that proviso	 which reads as follows: 998 " Provided that (d) where an unregistered firm is assessed as a registered firm under clause (b) of sub section (5) of Section 23	 during any year	 its losses shall also be carried forward and set off under this section as if it were a registered firm ". From this	 it is argued	 as it was argued in the High Court	 that even the losses of an unregistered firm can be carried to the partners ' account	 as if the firm were registered. No doubt	 if the proviso is read in an extended manner	 the result for would follow; but a careful reading of it would show that it was not designed to enable the Income tax Officer to forego the obligation laid on him by cl. (b) of section 23(5)	 to find out the interests of the Revenue. To read this proviso as enabling the Income tax Officer to overlook the said clause is to give no meaning to the words " during any year". Those words form a material part of the proviso	 because the proviso with or without those words makes an entirely different sense. Without those words	 it gives a general power to carry the losses to the partner 's account. With those words	 it only provides for a continent in which an unregistered firm treated as such in the previous years	 is sought in any particular year to be treated as a regis tered firm	 and by reason of its carrying some business losses in the past	 arrangement for the carrying forward and absorption of those losses has to be made for the year in which it is to be treated as a registered firm. In that event	 the proviso provides that its losses shall be carried to the partners ' account	 as if it were a registered firm. It is inconceivable that if the firm was carrying heavy business losses	 it would suddenly be treated in a year of assessment as a registered firm	 so that its losses might give relief to the partners and not give revenue to the State. This proviso would only be resorted to	 when in spite of taking the	 losses to the accounts of the partners	 more revenue would be available to the State. The proviso is an enabling one. An unregistered firm	 treated as such in previous years	 may	 during any year	 be treated as a registered firm provided the Revenue would 999 benefit. It may be that the firm may have made a loss in that year or was carrying a loss from the previous years but	 if by treating the firm as registered	 the Revenue would be benefited	 the proviso can be used. But there is no general power to act this way to the detriment of the Revenue. To give any other interpretation to this proviso will mean that the words " during any year " have not received any meaning and that the proviso is interpreted to make it not incumbent on the Income tax Officer to consider the interests of the Revenue	 as required by cl. (b) of section 23(5). The two Provisions must be read in harmony	 and when so read	 yield the only result that proviso (d) is to be invoked	 subject to the conditions under section 23(5)(b) to obtain more revenue for the State by applying section 23(5)(a). It would appear	 therefore	 that the Income tax Officer in the light of the losses determined by the Appellate Assistant Commissioner	 was under a duty to apply his mind de novo to the problem which he had undertaken	 when he resorted to section 23(5) (b). It is admitted that if the matter had been so plain to him	 he would not have	 if he did his duty correctly under that provision	 carried the losses to the partners ' account. The only question	 therefore	 Which survives for determination is whether the order of the Appellate Assistant Commissioner left the Income tax Officer free of his earlier order	 and whether he was under a duty to reconsider the position under section 23(5) (b). When the basis for assessing a profit was gone	 it is manifest that there was nothing but loss to carry forward to the partners ' account. With the fall of the assessment in this manner	 fell the need for applying the special provisions of cl. (b) of section 23(5) to the case. Indeed	 the duty of the Income tax Officer indicated a contrary course	 if he was to act under section 23(5) (b) at all. The order of the Appellate Assistant Commissioner was passed in respect of three years ' assessment	 and was a consolidated order. He set out in parallel columns the income and losses of the firm and not of the partners and directed the Income tax Officer to 1000 modify the assessments accordingly. The intention obviously underlying that order was to put the matter at the stage at which the assessable income of the assembly firm was determined before computing the tax thereupon. To compute the tax	 the Income fax Officer had to determine whether the loss occasioned in the first year should be carried forward to the assessee firm in the subsequent year	 and he could not give effect to the order of the Appellate Assistant Commissioner fully	 unless he determined once again the question under section 23(5) (b). In other words	 the implication of the appellate 'order was to take the matter prior to the order regarding the treatment of the unregistered firm as a registered firm	 and of necessity	 that order fell to the ground as being passed beyond that stage. It is contended on the strength of the ruling of the Privy Council in Commissioner of Income tax vs The Tribune Trust	 Lahore (1) that once the assessment is final and valid	 it remains so until it is set aside	 but once it has become final	 it cannot be altered except under sections 34 and 35. No exception can be taken to the statement of the law by the Privy Council	 which	 with all due respect	 is absolutely correct	 but it is impossible to hold	 on analogy	 that the order determining that this unregistered firm should be treated as registered	 had equally become final and not open to further consideration. Learned counsel for the Depart ment also urged on the strength of Commissioner of Income tax vs McMillan & Co. (2) and Commissioner of Income tax vs Amritlal Bhogilal & Co. (3)	 that if the powers of the Appellate Assistant Commissioner did not involve a review of the determination by the Income tax Officer under 'section 23(5) (b)	 this result could not indirectly follow. No doubt	 the Appellate Assistant Commissioner could not	 if the matter had gone before him in appeal against the order under that section	 have interfered. But the Appellate Assistant Commissioner was exercising his powers under section 31 of the Act and annulling the assessment (1) (2) ; 	 (3) 1001 of the first year and converting a profit in that year into a loss. None can deny that he had that power in the appeal which was before him. Section 31(4) of the Act enjoins that where as the result of an appeal any change is made in the assessment of a firm	 the Appellate Assistant Commissioner may authorise the Income tax Officer to amend accordingly any assessment made on any partner of the firm. This power was implicit in the order which the Appellate Assistant Commissioner passed	 namely	 that there was a loss in the assessment year in question and the assessments for the three years had to be modified. The Income tax Officer therefore was under a duty to modify the assessments of the partners accordingly	 and to take the matter up again from the point at which the order of the Appellate Assistant Commissioner had placed it. He had once again to determine whether he would	 in the altered circumstances	 apply s.23(5)(b) to this case or not. In our opinion	 the Income tax Officers in questiondid not do their duty as required by law	 and we should	 therefore	 by a writ compel them to do so. As regards the argument that the petition is directed against wrong persons and for a wrong relief	 we do not think that it is so. The petition sought relief against the Union of India	 which	 in any event	 was not concerned with this matter	 and was wrongly joined. But the two Income tax Officers who dealt with this matter	 were required under the statute to do their duty once again in the matter of the application of section 23(5) (b) of the Act. That they failed to apply their mind to this matter under a wrong apprehension of the law is manifest	 and they did not give effect to the orders of the Appellate Assistant Commissioner. The assessee firm having failed to secure this relief from all the authorities superior to the Income tax Officers	 it was open to the High Court by a writ to order the Income tax Officer concerned to hear and determine this matter in accordance with law. This is precisely the relief which was claimed in the High Court and is now claimed in the present appeal. We 126 1002 think	 with due respect	 that the High Court should have	 on a correct appraisal of the legal situation	 ordered this relief	 and we accordingly	 after explaining the law applicable to the case	 order the appropriate Income tax Officer to hear and determine this matter in the light of our observations. We may set down here that the two partners of the firm to whom relief has been given by way of refund after the Appellate Assistant Commissioner 's order undertook unconditionally to refund the amounts	 before the matter is considered. by the Income tax Officer. We order that the two partners shall return the amounts in the manner to be ordered by the Income tax Officer	 before action is taken to determine the matter. In the result	 the appeal is allowed with costs throughout to be paid by respondents 2 and 3. The Union of India shall	 however	 bear its own costs. It may be noted that no separate costs were incurred by it either in this Court or in the Court below. It joined respondents 2 and 3 in the statement of the case filed in this Court and also appeared through the same counsel in both the Courts. Appeal allowed.

The Income tax Officer found that the assessee	 an unregis tered firm	 had made a profit in the assessment year 1940 41. He treated it as registered under section 23(5)(b) of the Act	 assessed the partners and carried the profit to their individual returns	 making no demand on the firm. For the next two assessment years	 however	 the firm was assessed as unregistered firm. For all the three assessment years	 the Income tax Officer treated the firm as " resident and ordinarily resident ". The firm appealed against all these assessments. The appeals were all consolidated and heard together by the Appellate Assistant Commissioner. He found that the firm was non resident	 the computation of income made by the Income tax Officer was erroneous	 that in the assessment year 1940 41 there was a loss and during the subsequent years the firm had made profits. He	 therefore	 directed the Income tax Officer to modify the assessments accordingly. Thereupon the Income tax Officer gave relief to the partners for the year 1940 41 and directed certain refunds to be made to them. The firm was not satisfied and moved both the Income tax Officer and the Appellate Assistant Commissioner 987 found to have incurred a loss in the first of the three assessment years	 it could not for that year be treated as a registered firm and was entitled to carry forward the loss to the subsequent years. They declined to interfere on the ground that the direction of the Income tax Officer under section 23(5)(b)	 not being appealable	 had become final and the time within which the original order of the Income tax Officer could be rectified had also run out. The firm went up to the Commissioner and the Central Board of Revenue	 but to no effect. Thereafter it moved the High Court under article 226 of the Constitution. The single Judge who heard the matter declined to interfere. The Division Bench on appeal agreed with the single judge. The firm appealed to this Court. The question for decision was whether after the finding of profit made by the Income tax Officer had been turned to one of loss by the Appellate Assistant Commissioner on appeal	 the original decision of the Income tax Officer to treat the firm as a registered one under section 23(5)(b) could remain intact. Held	 that since the Income tax Officer could treat an un registered firm as a registered one under section 23(5)(b) of the Indian Income tax Act only if there was a profit	 the reversal of the finding of profit made by him by the Appellate Assistant Commissioner must automatically take away the jurisdiction of the Income tax Officer to act under that section and his order made thereunder must fall through. It made no difference in the instant case	 whether the Appellate Assistant Commissioner 's order was one under cl. (a) Of section 31(3) or under cl. (b) of that section	 for the effect of the order in law in either case would be the same	 namely	 the annulment of the assessment resulting in the restoration of the case back to its original position. It was not correct to suggest that under proviso (d) to section 24(2) Of the Act the losses of an unregistered firm could be carried to the partners ' account as if the firm was registered. That proviso was not intended to enable the Income tax Officer to forego the obligation laid on him by cl. (b) Of section 23(5)	 i.e.	 to find out the interest of the Revenue	 and thus to render the words 'during any year in proviso redundant. The effect of the provisions of section 23(5)(b) and the proviso (d) to section 24(2)	 which must be read together	 was that the proviso was to be invoked subject to the conditions under section 23(5)(b) to obtain more revenue for the State by applying section 23(5)(a). Although the Appellate Assistant Commissioner could not have interfered with the order made by the Income tax Officer under section 23(5)(b) of the Act in an appeal against that order	 the position must be different when the assessment itself was subject to appeal under section 31 Of the Act	 and the Appellate Assistant Commissioner under section 31(4) authorised the Income tax Officer to modify the assessment in the light of his direction. It would	 therefore	 be the duty of the Income tax Officer to consider de 988 novo whether in the altered circumstances the provisions of section 23(5)(b) of the Act could at all be applied. Commissioner of Income tax vs Tribune Trust	 Lahore	 	 Commissioner of Income tax vs McMillan & Co.	 ; and Commissioner of Income tax vs Amritlal Bhogilal & CO.	 	 considered.