An order passed by the AAC after issuing a notice under S. 31 and hearing the appeal on merits is an order under S. 31 and is therefore appealable.

CHAGLA, C. J. :- The question that arises in this Reference is whether a certain order passed by the Appellate Assistant Commissioner was an order under S. 30(2) or an order under S. 31. If the order was under S. 31, it was appealable; if it was one under S. 30(2), no appeal could lie under that order. The Tribunal has taken the view that the order was under S. 30(2) and therefore refused to entertain the appeal preferred by the assessee from that order, and the question submitted to us by the Tribunal in substance raises this question.

2. Now, a few facts might be stated. The assessment order was passed on 30-4-1949, and the notice of demand was served upon the assessee on 13-2-1950. The last day for preferring the appeal to the Appellate Assistant Commissioner was 16-3-1950. For certain reasons which it is not necessary to go into at the present stage, the assessee did not post the memo of appeal from Ahmednagar where he was living up to 16-3-1950, and the petition for appeal reached the Appellate Assistant Commissioner in Poona to whom it was posted on 18-3-1950. Therefore, when the petition for appeal reached him it was clearly out of time by two days. On 5-5-1950, a - notice was issued by the Appellate Assistant Commissioner calling upon the assessee to snow cause why us appeal should be entertained although out of time and on 11-5-1950, the assessee showed cause giving reasons why the delay should be condoned. Then on 1-9-1950, a notice was issued by the Appellate Assistant Commissioner under S. 31 to the effect that the appeal preferred by the assessee had been received and registered by the office of the Appellate Assistant Commissioner and 19-9-1950, was fixed for hearing and final disposal of the appeal at Ahmednagar and the assessee was informed that he should appear in that office in person or by an authorised agent or by a pleader duly instructed who would be able to answer all material questions arising in the appeal. He was further informed that in default of his appearance on the day mentioned the appeal will be heard and determined in his absence.

Pursuant to this notice the appeal was heard on 19-9-1950, and it is not disputed that the appeal was heard on merits by the Appellate Assistant Commissioner. Ultimately on that day he passed an order to the effect that he saw no reason why the assessee could not submit the appeal petition within the period of limitation. The Appellate Assistant Commissioner, therefore, expressed the opinion that he was unable to condone the delay, and the order he passed was that the appeal was rejected as time-barred, and the question arises whether on these farts the order of the Appellate Assistant Commissioner falls under S. 31 or under S. 30(2).

3. Now, in our decision in - Porbunderwalla v. Commr. I T. Bombay City, AIR 1952 Bom 157 (A) we considered the scheme of Ss. 30 and 31 and we pointed out that there was an intermediate stage between the presentation of the appeal and the hearing of the appeal as provided by the last clause of S. 30(2) and that intermediate stage relates to those appeals which were out of time, but for which the appellant asked for condonation of delay from the Appellate Assistant Commissioner and it was left to the decision of the Appellate Assistant Commissioner whether to condone or not to condone the delay. It is clear that it is only after that intermediate stage is passed that it is competent to the Appellate Assistant Commissioner to issue a notice fixing a day and place for the hearing of the appeal under S. 31.

Now, in this case, as already pointed out, in order to decide whether the delay should be condoned or not, the Appellate Assistant Commissioner actually issued a notice to show cause upon the assessee on 5-5-1950. The assessee showed cause on 11-5-1950. It was open to the Appellate Assistant Commissioner to decide that no sufficient cause had been shown by the assessee for condonation of the delay. But instead of corning to that conc