The Madras High Court ruled that the demand in the computation sheet and the demand notice cannot be sustained if the income tax assessment order did not propose any additions. The bench quashed the computation sheet demand and demand notice.
The petitioner, BVM Global Education Trust who had filed the return of income for the assessment year 2022-2023, found themselves entangled in a tax dispute. Initially, under Section 143(1) of the Income Tax Act, 1961, an intimation was received, processing the return and accepting the refund claim. Subsequently, the assessment underwent scrutiny, resulting in an assessment order dated 07.03.2024, which accepted the return of income without proposing any additions.
However, despite the assessment order’s conclusion, the petitioner was startled by a demand for payment amounting to Rs.15,27,75,090/- as per the computation sheet and demand notice. Promptly, the petitioner filed a writ petition challenging this demand.
During proceedings, the petitioner’s counsel highlighted the absence of any proposed additions in the assessment order and pointed out glaring errors in the computation sheet and demand notice.
In response, Mr. V. Mahalingam, representing the respondents, acknowledged a discrepancy between the assessment order and the impugned communications.
Upon examining the assessment order, a single bench of Justice Senthilkumar Ramamoorthy court noted that no additions were intended regarding the issues outlined in the order. Consequently, the demand specified in the computation sheet and demand notice was deemed unjustifiable and was set aside.
As a result, the writ petition was allowed, and the erroneous computation sheet and consequential demand notice were quashed. No costs were awarded in the matter. Additionally, associated miscellaneous petitions were closed in light of the decision.
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