(1.) The petitioner filed his return under the Income Tax Act for the year 1961-62 showing a net loss of Rs. 5.306. In the accounting year the petitioner had taken up two contract works: (1) the construction of a lock and bridge at Trikkunnapuzha and (2) the execution of a bund at Chakkarachal. For the former item of work the Income Tax Officer estimated the income on the basis of his calculation of the net profit at 12 1/2 per cent of the gross receipt by the petitioner and on the second item the Income Tax Officer did not accept the return of loss submitted by the petitioner. On the other hand he determined the net profit at 10% of the gross receipt. Against this order of assessment the petitioner filed an appeal before the Appellate Assistant Commissioner of Income Tax, Trivandrum. The appellate authority accepted the contention of the petitioner with regard to the Chakkarachal work to the extent of holding that he should be deemed to have made no profit out of this work, but that the loss returned by the petitioner cannot be accepted. Ext. P-2 is a copy of that order. Against this order the petitioner filed an appeal before the Appellate Tribunal. Ext. P-3 is a copy of the appeal memorandum. In Ext. P3 he contended that the determination of the gross profit in respect of the contract with the Public Works Department at 12 1/2% of the gross receipt was arbitrary. He also contended that on the materials placed before the department, the loss returned in respect of the Chakkarachal work should have been accepted. The second respondent gave notice of the hearing of the appeal to the auditors appearing for the petitioner. There was no appearance and Ext. P-4 order was passed by the Tribunal negativing the contentions of the petitioner.
(2.) Petitioner questions Ext. P-4 order on the ground that the Appellate Tribunal has not considered the third ground raised by him in his appeal memorandum, namely the question whether he has sustained loss in respect of the Chakkarachal work. Petitioner's contention was that although there was no appearance for the petitioner on the date fixed for the hearing of the appeal, the Appellate Tribunal was bound to consider the appeal on its merits and should have entered findings on all the points raised by him in the appeal memorandum. The petitioner's counsel relied upon the ruling in Chenniappa Mudaliar v. Commissioner of Income Tax (53 ITR 323, 327). There the Madras High Court held that the Appellate Tribunal has no jurisdiction to dismiss an appeal on the ground that there was no appearance for the assessee, when the appeal was called on for hearing, but that it must decide the appeal on its merits. Therefore, the only question for consideration in this case is whether there was a disposal of the appeal on merits.
(3.) On reading Ext. P-4 order I am satisfied that that was a decision on the merits and not a disposal for default of appearance. In Ext. P-4 it is stated: