SUBBA RAO, C.J. :- The Income-tax Appellate Tribunal, Madras Branch, referred to the High Court of Madras, under S. 66 (1) of the Indian Income-tax Act, the following two questions of law :-

1. Whether the appeal did not lie to the Appellate Assistant Commissioner against the Order of the Income-tax Officer under S. 46 (1) because of the first proviso to S. 30 (1) of the Act?

2. Whether the failure of the Income-tax Officer to object to the competency of the appeal gave the Appellate Assistant Commissioner jurisdiction to hear and decide the appeal?

2. The case has been transferred to this Court after its constitution.

3. The undisputed facts that gave rise to the Reference may be briefly stated :- For the assessment year 1948-49, the assessee was assessed to income-tax in a sum of Rs.2, 19, 541-2-0 and was directed to pay the same on or before 5-3-1949. On 8-3-1949 he sent a cheque for Rs. 25,000 and prayed for the payment of the balance in instalments of Rs. 25,000 per mensem. On 11-3-1949, the Income-tax Officer refused to grant time as the assessee made default in the payment of the tax. On 19-3-1949, the Income-tax Officer levied a penalty of Rs. 2,000 and called upon the