P.V. Narayanan Nambiar, J. 1. The petitioner is an assessee to income-tax on the file of the second respondent. She filed her return of income for the assessment year 1984-85 on July 19, 1985, before the third respondent declaring the net income at Rs. 13,43,720 of which Rs. 12,66,969 represented the income disclosed under Section 273A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), within 15 days from the date of search and seizure conducted in the petitioner's business and residential premises on March 5, 1985.
2. The third respondent completed the assessment for the year 1984-85 under Section 143(3) of the Act on March 31, 1986, on a total income of Rs. 17,32,260 on making an addition of Rs. 50,000 being unexplained cash credit. The third respondent served, exhibit P-1 assessment order and demand notice dated March 31, 1986, on the petitioner. On appeal before the Commissioner of Income-tax (Appeals), the addition of Rs. 50,000 was confirmed as per exhibit P-2 order. The petitioner then preferred a second appeal before the Income-tax Appellate Tribunal which as per exhibit P-3 order dated July 6, 1988, set aside the addition of Rs. 50,000 with a direction to the Assessing Officer to re-examine the genuineness of the cash credit after affording a reasonable opportunity to the petitioner. Thereafter, the fourth respondent issued exhibit P-4 letter to the petitioner stating that the total tax payable by her, after keeping in abeyance the proportionate tax, interest, etc., on Rs. 50,000, is Rs. 14,56,755 and the net tax to be paid was worked out to Rs. 3,63,349 after giving provisions for adjustment of refund due to the petitioner. These figures include a sum of Rs. 2,40,897 being interest under Section 220(2) of the Act.
3. On April 24, 1989, the second respondent Assistant Commissioner of Income-tax, passed exhibit P-5 order under Section 154 of the Act in which it was held that the credit of Rs. 50,000 was genuine and thus the total income was redetermined to be Rs. 16,82,260. He also issued exhibit P-5(A) notice of demand on the same date. On receipt of exhibit P-5(A) notice, the petitioner filed exhibit P-6 petition under Section 264 of the Act before the first respondent with a prayer to give direction to the second respondent to charge interest under Section 220(2) of the Act only from the date on which the demand fell due on the basis of exhibit P-5(A), but the same was rejected as per exhibit P-7 dated February 21, 1991. Hence, the petitioner has approached this court challenging exhibit P-5(A) demand notice and exhibit P-7 order of the first respondent and prays for quashing the same.
4. It is the case of the petitioner that the Income-tax Appellate Tribunal set aside the additional amount of Rs. 50,000 with a direction to the Assessing Officer to re-examine the genuineness of the cash credit and so interest is leviable only from the date of exhibit P-5, i.e., April 24, 1989, the date on which order under Section 154 of the Act was passed. It is her further case that exhibit P-1 assessment order was set aside by the Income-tax Appellate Tribunal and so interest should not have been demanded from March 31, 1986. According to her, the Assessing Officer overlooked the fact that exhibit P-1 assessment order was set aside by the Income-tax Appellate Tribunal and the only assessment which will govern the case is exhibit P-5.
5. Counsel for the petitioner contended that the Income-tax Act does not envisage two assessments, but only one and hence the only assessment as far as the petitioner is concerned is exhibit P-5. He thus developed his argument on the basis of Section 4 of the Act that income-tax shall be charged only for an assessment year in respect of the total income of the previous year. Piece meal assessment is not permitted under the Act, adds counsel. He placed reliance on the decisions reported in K. V. AL. M. Ramanathan Chettiar v. CIT[1973] 88 ITR 169 (SC) ; Brooks Bond and Co. Ltd. v. CIT [1986] 162 ITR 373 (SC) and CIT v. Chittoor Electric Supply Corporation [1995] 212 ITR 404 (SC) .
6. On the other hand, counsel for the Revenue argued that the Income-tax Appellate Tribunal has not set aside the entire order of assessment, but only directed reconsideration of the amount of Rs. 50,000 added to the income. Counsel also placed reliance on the decisions reported in New Woodlands v. CIT[1982] 138 ITR 795 (Kcr) ; CIT v. Chittoor Electric Supply Corporation [1995] 212 ITR 404 (SC) and also Section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964.
7. On going through exhibit P-3 order of the Income-tax Appellate Tribunal, it is seen that the appeal was not fully allowed and only the challenge against the additional amount of Rs. 50,000 was set aside. The operative portion of exhibit P-3 order is that "the appeal will be treated as partly allowed". In the circumstances, it cannot be said that the effect of exhibit P-1 assessment order was wiped out by the order of the Tribunal. Exhibit P-5 order was passed giving effect to the order of the Income-tax Appellate Tribunal. It is seen from exhibit P-3 order that the original assessment order and demand have not been wiped out or cancelled by virtue of the said order. The assessment order was not even set aside, it was set aside only on the specific point regarding the addition of Rs. 50,000. Therefore, it is clear that there is only a partial setting aside of the assessment order.
8. In the decision reported in New Woodlands v. CIT [1982] 138 ITR 795 (Ker), it is held that the notice of demand remains valid and effective to the extent that the tax is finally determined to be due and payable by the assessee, and in case of reduction, so in the case of a remand, the enforce-ability of the notice of demand is qualified by and subject to the fresh determination of the liability. This principle is upheld by the Supreme Court in the decision reported in CIT v. Chittoor Electric Supply Corporation [1995] 212 ITR 404.
9. The provisions contained in Section 3 of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, also support the case of the Revenue in which it is stated that where Government dues are reduced in appeal or proceeding, it shall not be necessary for the taxing authority to serve upon the assessee a fresh notice of demand and any notice of payment served upon the assessee before the disposal of the appeal or proceedings may be continued in relation to the amount so reduced, from the stage at which such proceedings stood immediately before such disposal.
10. From what is stated above, it is clear that there is nothing wrong in exhibits P-5(A) and P-7. The first respondent has considered the point raised by the petitioner in exhibit P-7 order and the reasoning adopted by him is justifiable on the facts of the case. Hence, no interference is called for by this court against exhibit P-5(A) demand notice and exhibit P-7 order.
11. In the result, the original petition is only to be dismissed and I do so.