INDIRA RANI B Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(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.) 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 K. V. AL. M. Ramanathan Chettiar v. CIT, 1973 88 ITR 169; Brooks Bond and Co. Ltd. v. CIT, 1986 162 ITR 373 and CIT v. Chittoor Electric Supply Corporation, 1995 212 ITR 404.