R. BALIA, SUSANTA CHATTERJI, J. ( 1 ) ). This Special Civil Application has been filed at the instance of the petitioner assessee praying inter alia for a writ of certiorari quashing the decision of the respondent department calling upon the petitioner-assessee to pay under Section 220 of the Income-Tax Act 1961 (hereinafter referred to as the Act) the interest of Rs. 3 72 852 on declaration that the respondent cannot charge any interest under Section 220 (2) of the Act. ( 2 ) IT is stated in details that the Assessment Order for the Assessment Year 1984-85 on total income of Rs. 21 54 740 was passed on 30-3-1987. On May 22 1987 Commissioner of Income-Tax (Appeals) passed an order reducing the income for the A. Y. 1984-85 to Rs. 4 9 589 Department filed appeal before the Income-ax Appellate Tribunal Ahmedabad Bench B (hereinafter referred to as the Tribunal) and the Tribunal passed order dated 23-7-1992 increasing the income to Rs. 12 94 380 for A. Y. 1984-85. Consequently the respondent authority passed order dated 30-12-1992 to give effect to the order of the Tribunal and calculated the interest under Section 220 of the Act at Rs. 27 674 and the petitioner was directed to pay the amount of Rs. 6 3 790 wherein interest was calculated at Rs. 3 21 471 The petitioner however wrote a letter dated 30-3-1993 to the Deputy commissioner of Income-Tax requesting for charging the interest from 23-7-1993 i. e. the date on which the order was passed by the Tribunal till the date of payment. The petitioner by his another letter dated 30-3-1993 expressed willingness to pay off the demand of tax and intimating its desire to approach the Commissioner of Income-tax for the waiver of interest. By its representation dated 30 the petitioner applied for the waiver of the interest under Section 220 of the Act. There is another representation dated 14-12-1993 taking a stand that the interest cannot be charged from the date of original assessment order but can only be charged from the order of the Tribunal and request was made for the waiver of the interest under Section 220 of the Act of Rs. 3 72 852 The Commissioner of Income-tax by order dated 31 waived interest of Rs. 72 851 retaining interest of Rs. 3 72 852 The Commissioner of Income-tax by order dated 31 waived interest of Rs. 72 851 retaining interest of Rs. 3 0 0 Being aggrieved by the said order the assessee has approached this Court on the ground that for charging of interest under Section 220 of the Act what is needed in service of a demand notice under Section 156 and non-payment within 30 days of the service of the said notice of the demand the claim of interest can be raised. In the instant case as a result of the order of the Tribunal the petitioner has paid off the amount of Rs. 3. 36 401 which is the balance payable as a result of the order of the Tribunal without even any notice of demand from the department and therefore there is no question of applying Section 220 of the Act in the present case. It is alleged that nothing has been given in writing informing or intimating the petitioner the basis of calculation of Rs. 3 72. 852 and asking the petitioner to pay the same. It is contended that interest under Section 220 of the Act can be charged after the order of the Tribunal raising the demand. and if the petitioner has not paid the said demand within 30 days of the receipt of notice under Section 156 of the Act. It is further contended that the question of recovery of any interest under Section 220 of the Act from the petitioner cannot arise as the petitioner has paid the demand even before issuance of notice under Section 156. Developing all these points the petitioner has prayed for the aforesaid reliefs in this petition. ( 3 ) THE petition is seriously opposed by the respondent by filing affidavit-in-reply. It is disclosed inter alia that the liability to pay interest under Section 220 (2) of the Act is automatic and it arises by operation of law. The liability to pay interest does not cease and such liability is absolute liability and in the determination of quantum of interest as is made in the instant case interference by Writ Court is not at all necessary. ( 4 ) ). Mr. The liability to pay interest does not cease and such liability is absolute liability and in the determination of quantum of interest as is made in the instant case interference by Writ Court is not at all necessary. ( 4 ) ). Mr. J. P. Shah learned Counsel appearing for the petitioner-asessee has strongly contended that the Scheme as envisaged under Section 156 of the Act provides inter alia that when any tax interest penalty fine or any other sum is payable in consequence of any order passed under the Act the Assessing Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Mr. Shah submitted that in the absence of any such notice of demand the claim for interest in the instant case is vitiated. Besides the claim of interest under Section 220 (2) of the Act can be made only after the order of the Tribunal as the facts of the case indicate. In support of his contention Mr. Shah has relied upon the decision in the case of Ambica Mills Ltd. v. It (1993 203 ITR 84 and has laid much emphasis upon the ratio of the said decision highlighting that as the provisions are absolutely unambiguous and clear and it is not necessary to refer to the decision of the Kerala High court in the case of ITO v. V. A. V. Thomas and Co. (1986) 160 ITR 818 and the decision of the Delhi High Court in the case of Bharat Commerce and Industries Ltd. v. Union of India (1991) 188 ITR 277 . In view of the aforesaid decision according to Mr. Shah the act done or caused to have been done in demanding the interest are wholly unwarranted and uncalled for. The attention of this Court has been drawn to the scope of Section 220 (2) Proviso alongwith Rule 118 of the Act to appreciate the facts of the case and to deduce the principle of law as warranted thereby. ( 5 ) ). The attention of this Court has been drawn to the scope of Section 220 (2) Proviso alongwith Rule 118 of the Act to appreciate the facts of the case and to deduce the principle of law as warranted thereby. ( 5 ) ). It is the main contention of the petitioner-assessee that regard being had to the facts of the present case and in case of reduction being made by the Commissioner of Income-Tax and the order subsequently being made by the Tribunal by enhancing the amount and in this interregnum period the petitioner has no liability and both the orders should be taken as fresh orders and/or orders afresh and unless the demand is followed by notice under Section 115 of the Act the claim of the interest is falacious. ( 6 ) ). Mr. Mihir Thakore learned Counsel appearing for the respondent has argued at length taking this Court to the facts of the case in details and various reported decision i. e. in the case of ITO v. Ghanshyamdas Jatia [cal. 105 ITR 693 (relevant portion on page 703]; K. P. Abdul Karim Haji v. ITO. 141 ITR 120 relevant portion at page 127; Gujarat State Fertilizers Co. Ltd. v. ITO (Gujarat 142 ITR 787 Bardolia Textile Mills v. ITO (Guj.) 151 ITR 389; Mohammed Bssa Moosa Sait v. Gift-tax Officer and Ors. 167 ITR 338; Bharat Commerce and Industries Ltd. v. Union of India and Ors. 188 ITR 277; Vikrant Tyres Ltd. v. First Income Tax Officer (Kar) 202 ITR 454 and in the case of Shri Ambica Mills Ltd. v. Income-tax Officer 203 ITR 84. ( 7 ) HAVING gone through the materials on record and considering the principles of law as observed in various reported decisions as indicated above to consider the various dimensions of the matter we have found that Section 220 (2) of the Act clearly lays down that if the amount specified in any notice of demand under Section 156 is not paid within the period limited under sub-section (1) the assessee shall be liable to pay simple interest at one and one-half per cent for every month or part of a month comprised on the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid. It has been provided that where as a result of an order under Section 125 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264 or an order of Settlement Commission under sub-section (4) of Section 245-D the amount on which interest was payable under this section had been reduced the interest shall be reduced accordingly and the excess interest paid if any shall be refunded In view of the aforesaid section and its proviso and in view of the principles of law as to the scheme of the liability and as to the payment of interest and the nature of the assessment order pending appeal at various stages there is absolutely continuity of the proceedings in view of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act 1964 Section 3 thereof lays down that where any notice of demand in respect of any Government dues is served upon an assessee by a Taxing Authority under any scheduled Act and any appeal or other proceeding is filed or taken in respect of such Government dues then- (a) where such Government dues are enhanced in such appeal or proceeding the Taxing authority shall serve upon the assessee another notice of demand only in respect of the amount by which such Government dues are enhanced and any proceedings in relation to such Government dues as are covered by the notice or notices of demand served upon him before the disposal of such appeal or proceeding may without the service of any fresh notice of demand be continued from the stage at which such proceedings stood immediately before such disposal; where such Government dues are reduced in such appeal or proceeding- (i) it shall not be necessary for the Taxing Authority to serve upon the assessee a fresh notice of demand; (ii) The Taxing Authority shall give intimation of the fact of such reduction to the assessee and where a certificate has been issued to the Tax Recovery Officer for the recovery of such amount also to that officer; (iii) any proceedinga initiated on the basis of the notice or notices of demand served upon the assessee before the disposal of such appeal or proceedings may be continued in relation to that amount so reduced from the stage at which such proceedings stood immediately before such disposal. ( 8 ) ). ( 8 ) ). This Section 3 has been considered in depth and details and it has consistently been found that during the pendency of the proceedings in appeal against the order of the Assessing Authority before appropriate forum in different stages there is always continuity of the proceedings. Thus finality of proceedings notice of demand is brought upon the surface. It has never died at any time during the pendency of the proceedings before the appellate authorities. The concept of keeping the notice of demand in abyance (sic.) and as to whether the liability of the assessee is absolved has also been considered by taking into consideration the scheme of the Act and the impact of various sections to set out the scope of liability of the assessee to pay the interest. ( 9 ) ). WITH great anxiety we have gone through all the reported decisions cited before us either in support of the contention of the assessee or in support of the contention of the respondent. We find that Section 220 (2) of the Act refers to the charging of interest on the sum specified in the notice of demand under Section 156. A notice of demand under Section 156 in the context necessarily means a notice of demand in pursuance of an order creating demand for the first time. When such order creating demand is subjected to other proceedings under the Act which may result in reduction of demand the proviso to Section 220 of the Act comes into operation and the demand of interest is to be reduced in terms of such reduced demand. Obviously reduction in demand under Section 220 (2) Proviso refers to demand as reduced by the order which ultimately becomes final as a result of one or more proceedings taken under the Act and not at every stage of proceedings amongst the multiple appellate forum provided under the Act. In the present case the notice of demand under Section 156 was issued in pursuance of order passed under Section 143 (3) of the Act. The said demand finally stood reduced to the extent order passed under Section 254 by the Tribunal though in between the Commissioner of Income-tax (Appeals) had granted greater relief in its order under Section 250 of the Act. The said demand finally stood reduced to the extent order passed under Section 254 by the Tribunal though in between the Commissioner of Income-tax (Appeals) had granted greater relief in its order under Section 250 of the Act. Considering the provisions of Section 220 (2) proviso thereto and Section 156 and keeping in view the fact that tax on income is a debt due on the closing debt of the previous year though quantified later on in accordance with the provisions of the Act the interest which was payable on the amount demanded vide notice under Section 156 as per the assessment order has to be reduced only to the extent it stood reduced finally by the order of Tribunal under Section 254 of the Act. Regard being had to the scope of the facts of the present case we hold that in view of the scope of proviso to Section 220 (2) of the Act the notice of demand must relate back to the original notice of demand. At no stage while the appeals were pending before the different forums the same lost its force. The moment there is finality of proceedings original notice of demand comes to surface and for any default on the part of the assessee the claim of interest can be levied and the contention raised by the assessee in the instant case does not have any merit. On the basis of the original notice of demand on finality of the processings the claim of interest can be claimed. We however do not consider about the calculation of the interest on the basis of the principal. We find that the stand taken by the revenue authority is neither contrary to nor inconsistent with the provisions of law and the interference by Writ Court in the facts and circumstances of this case is not necessary. ( 10 ) ). This petition accordingly fails and is rejected. Rule is discharged with no order as to costs. .