JUDGMENT : B.P. Das, J. - The petitioner has filed this writ petition under Articles 226 and 227 of the Constitution of India challenging the order dt. 17th Aug., 2000 passed by the Asstt. CIT, Rourkela Circle, Rourkela-OP No. 1 u/s 251 of the IT Act, 1961 ('the Act', hereinafter) for the asst. yr. 1989-90, vide Annex. 3. 2. Main challenge of the petitioner in the writ petition is that while passing aforesaid order dt. 17th Aug., 2000 for the asst. yr. 1989-90 under Annex. 3, the Asstt. CIT-OP No. 1 did not act properly in disallowing the unabsorbed depreciation loss of the preceding assessment year to the tune of Rs. 89,138 to be carried forward to subsequent assessment year. According to the learned Counsel for the petitioner, the order of the Asstt. CIT is clearly not in consonance with the order passed by the CIT(A)-II, Bhubaneswar, vide Annex. 2. 3. The brief facts leading to the writ petition are that for the asst. yr. 1989-90, on completion of assessment u/s 144 of the Act, the total income was determined at Rs. 1,13,360. The petitioner challenged the said determination of quantum of income and disallowance of unabsorbed depreciation etc. which was not carried forward in the relevant year in the appeal before the CIT(A)-II, OP No. 2. The appellate authority by a common order dt. 23rd June, 2000 (Annex. 2) disposed of the appeal preferred by the petitioner for the asst. yr. 1989-90 as well as its appeal filed relating to the dispute raised for the asst. yr. 1990-91. The CIT(A) disposed of the appeal for the asst. yr. 1989-90 with a direction that the benefit of unabsorbed depreciation should be allowed and the same was to be carried forward on the basis of the provisions of the statute. According to the learned Counsel for the petitioner, the AO, i.e., the Asstt. CIT-OP No. 1, as per the statute instead of giving effect to the appellate order (Annex. 2), passed the order u/s 251 of the Act determining the net taxable income at Rs. 78,810 and levied tax separately along with interest at Rs. 1,47,433. The claim of the petitioner is that there was unabsorbed depreciation loss of the preceding period, which was to be brought forward from the asst. yr. 1988-89. 2), passed the order u/s 251 of the Act determining the net taxable income at Rs. 78,810 and levied tax separately along with interest at Rs. 1,47,433. The claim of the petitioner is that there was unabsorbed depreciation loss of the preceding period, which was to be brought forward from the asst. yr. 1988-89. Though this was conclusively determined by the CIT(A)-OP No. 2, OP No. 1 has denied to give the said benefit to the petitioner. 4. A counter-affidavit has been filed by the Revenue taking the stand that while giving effect to the order of the CIT(A) for the asst. yr. 1989-90, the Asstt. CIT on verification of assessment records for the asst. yr. 1988-89 found that the assessment for the asst. yr. 1988-89 was completed u/s 144 of the Act on a total income at rupees nil. According to the Revenue, since the loss both under the head of business and depreciation was duly considered by the AO while framing the assessment order for the asst. yr. 1988-89, there was no unabsorbed depreciation loss left to be carried forward for set off in the subsequent years. The Revenue, therefore, submitted that the AO has rightly passed the order u/s 251 of the Act in accordance with the direction issued by the learned CIT(A) in his order dt. 17th Aug., 2000 (Annex. 3). It was further submitted that the unabsorbed depreciation available in the preceding assessment year was to be set off against the business income of the succeeding assessment years and in the instant case, there was no unabsorbed depreciation for the asst. yr. 1988-89 to be carried forward to the next assessment year. The sum and substance of the stand of the Revenue is that as the assessment proceeding for the asst. yr. 1988-89 was completed u/s 144 of the Act due to the laches on the part of the assessee and non-compliance of the notices issued under Sections 142(1) and 143(2), the income was assessed at nil and since the loss disclosed was not accepted by the AO, there was no unabsorbed depreciation or loss left in the preceding year to be set off in the subsequent year. 5. In this regard, let us have a look at the order passed by the CIT(A) on the appeal preferred by the petitioner for the asst. yr. 1989-90. 5. In this regard, let us have a look at the order passed by the CIT(A) on the appeal preferred by the petitioner for the asst. yr. 1989-90. The petitioner challenged the order of the AO completing the assessment in an ex parte manner before the appellate authority on the following grounds: (i) Completion of assessment in an ex parte manner. (ii) Determination of income at a higher figure. (iii) Disallowance of unabsorbed depreciation. (iv) Inclusion of profit on sale of fixed assets against the principle of computation of depreciation on block assets. The appellate authority in regard to completion of assessment u/s 144 of the Act in an ex parte manner found that in spite of issue of notice u/s 148 of the Act as the appellant did not file any return of income for the asst. yr. 1990-91, the AO issued notice under Sections 142(1) and 143(2) for the asst. yr. 1989-90 and after number of opportunities was given to the appellant, there had been a series of non-compliances for which the appellate authority held that the AO was perfectly justified in completing the assessment in an ex parte manner. So, the ex parte order of assessment passed was confirmed by the CIT(A)-II, Bhubaneswar. For the asst. yr. 1989-90, the appellate authority while considering the adjustment of unabsorbed depreciation, observed as follows: ...I am inclined to agree with the contention that the depreciation and carry forward unabsorbed depreciation are regulated as per provisions of Section 32 of the IT Act. It may be correct to disallow business loss if the return of income has not been filed within the time prescribed u/s 139 of the Act. However, the appellant is entitled for the benefit of unabsorbed depreciation allowance. The AO is, therefore, required to allow the same. The appellate authority in no uncertain term has directed the AO to allow the unabsorbed depreciation allowance. Except giving effect to the order of the appellate authority, the AO had no other option. After going through the order passed by the AO u/s 251 of the Act, we find that the AO has not complied with the order passed by the appellate authority. 6. We are constrained to say that if any order is passed by the appellate authority under the Act, the AO is required to comply with the same. After going through the order passed by the AO u/s 251 of the Act, we find that the AO has not complied with the order passed by the appellate authority. 6. We are constrained to say that if any order is passed by the appellate authority under the Act, the AO is required to comply with the same. The apex Court in this regard held that it should be kept in mind in future that the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities, which are binding on them [See Union of India and others Vs. Kamlakshi Finance Corporation Ltd., ]. 7. During the course of hearing, we were taken through the record, which was produced by the learned Counsel for the Revenue and we found therefrom that the petitioner for the asst. yr. 1989-90 had claimed unabsorbed depreciation as per the computation of income filed along with the return for which the particulars of depreciation had been given. 8. in view of the above position, we are of the opinion that the order dt. 17th Aug., 2000 passed by the AO vide Annex. 3 so far as it relates to disallowance of unabsorbed depreciation should be set aside and the matter should be remanded to the AO to pass appropriate order in consonance with the order passed by the CIT(A)-II, Bhubaneswar so far as it relates to the unabsorbed depreciation allowance. Accordingly we direct the same. There shall be no order as to cost.