A.N Sen, J.:— In this reference under section 66(1) of the Indian Income-tax Act, 1922, the following question of law has been referred to this court:

“Whether the Income-tax Officer's order dated March 30, 1963, drop-. ping the proceedings started under section 22(2) could be the subject of an appeal under section 30 of the Indian Income-tax Act, 1922?”

2. The facts of the case have been fully set out in the statement of the case and the same may briefly be indicated. The reference relates to the assessment year 1959-60. The assessee is a company carrying on business in manufacture and sale of matches. It was served with a notice under section 22(2) dated September 9, 1959, on September 17, 1959. The assessee did not submit any return within the time allowed under the notice but the assessee submitted a return on 25th August, 1961, disclosing a loss of Rs. 97,660. The Income-tax Officer, by his order dated 30th March, 1963, held that the assessee's claim to get the loss determined was barred by limitation prescribed under section 22(2A) of the Indian Income-tax Act, 1922, and that the same could not be revived when a notice under section 22(2) was issued. The Income-tax Officer further held that there was no further obligation on him to complete the assessment in such an event. The Income-tax Officer dropped the proceedings. Against the order of the Income-tax Officer the assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner dismissed the appeal holding:

“Section 30(1) does not provide for an appeal where the Income-tax Officer has failed to pass an order even though his refusal to pass an order may not be in accordance with law. No appeal is provided for against the Income-tax Officer's action.”

3. Against the order of the Appellate Assistant Commissioner the assessee preferred a further appeal to the Appellate Tribunal. The contention urged on behalf of the assessee before the Tribunal was that as the assessee had already been served with a notice under section 22(2), section 22(2A) did not apply, that the Income-tax Officer had no jurisdiction to pass the order he did and that the order was appealable. It was further submitted on behalf of the assessee before the Tribunal that the provisions contained in section 30 should be interpreted in a manner as will advance justice and equity. It was contended on behalf of the departmental representative before the Tribunal that there was no right of appeal against the order passed by the Income-tax Officer. The Tribunal dismissed the appeal and held:

“If no appeal is provided against a particular order passed by the Income-tax Officer, then the assessee cannot file an appeal before the Appellate Assistant Commissioner and ask for its being entertained on a liberal interpretation of the provisions of section 30. The Appellate Assistant Commissioner cannot assume a power which the statute has not given him. Looking into the provision of section 30(1) we find that there is no provision for an appeal against an order like the one before us. It is unfortunate that the assessee who appears to have a valid grievance has to be turned out on a technical ground. We are, however, unable to take any different view on a proper interpretation of the provisions of section 30.”

4. On the aforesaid facts the Tribunal has referred the question which we have earlier set out to this court. Mr. B.C Dutt, learned counsel appearing in support of the application on behalf of the assessee, has contended before us that the order of the Income-tax Officer should be construed with reference to the substance of the same and not with reference to the form in which it is made. It is the argument of Mr. Dutt that in considering or construing any order the substance of the order is what should be taken into consideration and the form of the order is not really material or important. In support of this submission Mr. Dutt has referred to the following decisions:

Dhonkal Singh v. Phakkar Singh [1893] ILR 15 All 84 [FB]., Sheoraj Singh v. Kamley Lal AIR 1945 All 172., All India Groundnut Syndicate Ltd. v. Commissioner of Income-tax [1954] 25 ITR 90 Bom., Puddomonee Dassee v. Roy Mulhooranath Chowdhry [1874] 12 Ben LR 411., Ajodhya Nath Pahary v. Srinath Chandra Pahary AIR 1921 Cal 472., Mohammad Taqi Khan v. Raja Ram AIR 1936 All 820 [FB]. Smt. Sarada Sundari Das v. Jabbar Ali AIR 1939 Cal 331. Ram Dahin Bahani Prosad v. Raghunandan Nunia AIR 1952 Assam 172., Dunna Venkata Rao v. Venkatakumaramahipathi Surya Rao AIR 1950 Mad 2., V.K. Murugappa Mudaliar v. P.M. Desappa Nayanim Varu AIR 1950 Mad 314. and Hajee Mohommed Metharu v. Joseph Achamma AIR 1957 Tra-Coch 92

5. It may be noted that most of these decisions relate to orders passed in execution proceedings and the court had to consider the nature and effect of the orders passed in such execution proceedings and in considering such orders the court had relied on the substance of the order and not on the mere form in which the order was made.

6. Mr. Dutt has next contended that the provisions relating to right of appeal should be construed liberally. In support of this construction Mr. Dutt has relied on the following decisions: Sir Hukumchand Mannalal & Co. v. Commissioner of Income-tax, Gopi Lai v. Commissioner of Income-tax and Mohan Lal Khemka v. Commissioner of Income-tax.

7. Mr. Dutt has argued that though the order of the Income-tax Officer in form purports to be an order dropping the proceeding, the order of the Income-tax Officer in effect and in substance adjudicates upon the claim of the assessee regarding loss and adjudicated the said loss to be nil. Mr. Dutt has contended before us that the Income-tax Officer could not have ignored the return filed by the assessee though beyond time and it was the duty of the Income-tax Officer to make the assessment of the said year and to compute the loss on the basis of the said return: It is the contention of Mr. Dutt that by dropping the proceeding the Income-tax Officer has really refused to entertain the claim of the assessee with regard to the claim for loss and has in effect and substance computed the loss to be nothing. On the basis of his aforesaid construction of the order Mr. Dutt submits that there has been a computation of the assessee's loss in the instant case and the order is, therefore, appealable under section 30.

8. Mr. Suhas Sen, learned counsel appearing on behalf of the department, has submitted before us that the order passed by the Income-tax Officer does not have the effect of determining or computing the loss of the assessee. Mr. Sen argued that the Income-tax Officer has merely dropped the effect thereof in that he has thereby refused to determine or compute the loss and there has been no determination or computation of the loss of the assessee. Mr. Sen has submitted that in this reference this court is not concerned with the correctness or otherwise of the decision of the Income-tax Officer and the only question for consideration before this court is whether an appeal against the said order of the Income-tax Officer is competent or not. Mr. Sen has argued that the right of appeal has been conferred under section 30 of the Indian Income-tax Act, 1922, and apart from the provisions contained in the said section no further right can be conferred on the assessee. It is the contention of Mr. Sen that the right of appeal is a creature of statute and if the statute has chosen to confer no right of appeal against the kind of order of the Income-tax Officer, no appeal will lie against such an order.

9. The right of appeal is conferred under section 30 of the Indian Income-tax Act, 1922. The material provision of the said section reads as follows:

“Any assessee objecting to………the amount of loss computed under-section 24…………may appeal to the Appellate Assistant Commissioner against………the order.”

10. We do not consider it necessary in the instant case to deal with decisions cited by Mr. Dutt as, in our view, the proposition that in construing an order the substance of the order is what is to be taken into account and not the mere form appears to be well-settled. It is also fairly settled that provisions regarding rights of appeal should be liberally construed. The question, however, that arises is what exactly is the true construction of the order. On a true construction of the order passed by the Income-tax Officer we are of the opinion that by the said order the Income-tax Officer did not reject the claim of the assessee with regard to the loss suffered by him and by his said order the Income-tax Officer has only chosen not to determine the amount of loss on the ground that the return was filed beyond time. Mr. Sen has rightly contended that in the instant case we are not concerned with the correctness or otherwise of this order of the Income-tax Officer. The only question that requires to be considered is whether as a result of this order by the Income-tax Officer the assessee has been deprived of his right to have the loss determined and to get the benefit of his loss in any subsequent years. If the effect of the order of the Income-tax Officer cannot deprive the assessee of any such right and only amounts to his refusal to determine the amount of loss in the year on the ground that the return was filed beyond the prescribed period there will not be any determination of the question of loss and naturally there will be no computation of any amount of the loss.

11. In the case of All India Groundnut Syndicate Ltd. v. Commissioner of Income-tax Chagla C.J observed at pages 100-101:

“Now, Sir Nusserwanji has argued that the order of the Income-tax Officer has become final inasmuch as no appeal was preferred against that order. We fail to understand which is the order of the Income-tax Officer which has become final. All that the Income-tax Officer says is ‘income nil’ and he says that in order to come to a decision that no income of the assessee is liable to tax and, therefore, there is no assessment under section 23(3). Now, the only right to appeal that is given to the assessee is under section 30 and that right of appeal is in respect of the amount of loss computed under section 24. Therefore, if the Income-tax Officer had computed the loss and if the assessee had been dissatisfied with that computation, he had a right of appeal under section 30, and if he refused to exercise that right the computation would have become final. In this case the assessee has actually submitted his return, that return has not been challenged or disputed by the Income-tax Officer, he comes to no conclusion on that, he does not give a finding, he does not compute the loss. All he says is ‘income nil’. It is difficult to understand how, when the Income-tax Officer does not give a finding and does not compute the loss made by the assessee, the computation of the loss by the assessee has become appealable under section 30 of the Act and no appeal having been preferred the computation becomes final. Before we reach this stage there must be a computation. But in this case there is no computation and no question, therefore, of either its finality or appealability arises.”

12. In that case the Bombay High Court held that the right which the legislature conferred upon an assessee under section 24(2) of the Indian Income-tax Act, 1922, to carry forward the loss of previous years for a period of six years is an absolute unqualified right and that right is not made conditional upon any computation made by the Income-tax Officer or any notice issued by him under section 24(3) and the Bombay High Court further held that the assessee was entitled under section 24(2) to set off the loss against the profit.

13. This decision of the Bombay High Court was referred to by the Supreme Court in the case of Commissioner of Income-tax v. Ranchhoddas Karsondas. In this case the Supreme Court considered the cleavage of opinion between the Bombay High Court on the one hand and the Calcutta High Court on the other and the Supreme Court upheld the view taken by the Bombay High Court.

14. In the case of Commissioner of Income-tax v. Kulu Valley Transport Co. P. Ltd., the Supreme Court by its majority view held that section 24(2) confers the benefit of losses being set off and carried forward and there is no provision in section 22 under which losses have to be determined for the purpose of section 24(2) and that section 22(2A) simply says that in order to get the benefit of section 24(2) the assessee must submit his loss return within the time specified by section 22(1) and that this provision must be read with section 22(3) for the purpose of determining the time within which a return has to be submitted. The majority view of the Supreme Court was that it can well be said that section 22(3) is merely a proviso to section 22(1) and the Supreme Court further held that a return submitted any time before assessment is made is a valid return. Grover J., delivering the judgment on behalf of the majority of the Bench, has observed at pages 529 and 530:

“Now, the question which was submitted for the opinion of the High Court, in the present case, consisted of two parts, viz., (1) whether the loss returned by the assessee for the assessment years in question was required in law to be determined by the Income-tax Officer, and (2) whether those losses could be carried forward after being set off under section 24(2) of the Act. The first part of the question stood concluded by the decision of this court in Ranchhoddas Karsondas's case. The Income-tax Officer could not have ignored the return and had to determine those losses. Section 24(2) confers the benefit of losses being set off and carried forward and there is no provision in section 22 under which losses have to be determined for the purpose of section 24(2). The question which immediately arises is, whether section 22(2A) places any limitation on that right. This sub-section which has been reproduced before simply says that in order to get the benefit of section 24(2) the assessee must submit his loss return within the time specified by section 22(1). That provision must be read with section 22(3) for the purpose of determining the time within which a return has to be submitted. It can well be said that section 22(3) is merely a proviso to section 22(1). Thus, a return submitted at any time before the assessment is made is a valid return. In considering whether a return made is within time, sub-section (1) of section 22 must be read along with sub-section (3) of that section. A return whether it is a return of income, profits or gains or of loss must be considered as having been made within the time prescribed if it is made within the time specified in section 22(3).

In other words, if section 22(3) is complied with, section 22(1) also must be held to have been complied with. If compliance has been made with the latter provision the requirements of section 22(2A) would stand satisfied.”

15. In the instant case, we are, therefore, unable to accept the construction of the order contended for by Mr. Dutt that there has been computation of the amount of the loss at nil by the order passed by the Income-tax Officer. The true effect of the order is that there has been no determination of the loss by the Income-tax Officer and as there has, therefore, been no computation of any amount of loss by the Income-tax Officer by the said order, the order cannot be considered to be appealable, however liberally section 30 may be interpreted. We, therefore, answer the question in the negative, against the assessee, and in favour of the revenue. There will be no order as to costs.

Hazra, J.:— I agree.

17. Question answered in the negative.