Case Law Details
BVM Global Education Trust Vs Assessment Unit (Madras High Court)
The recent case of BVM Global Education Trust vs Assessment Unit, heard in the Madras High Court, highlights the significance of precision in income tax assessment procedures. The petitioner contested the validity of a computation sheet and demand notice issued by the authorities, arguing that no additions were proposed in the assessment order.
The petitioner, BVM Global Education Trust, had filed its income tax return for the assessment year 2022-2023. Initially, the return was processed under Section 143(1) of the Income Tax Act, 1961, and the refund claim was accepted. Subsequently, the assessment was selected for scrutiny, leading to the issuance of an assessment order on 07.03.2024.
Crucially, the assessment order concluded that no additions were necessary concerning the petitioner’s income tax return. However, despite this finding, a computation sheet and demand notice were issued, demanding a significant sum of Rs.15,27,75,090/- from the petitioner.
In response, the petitioner challenged the computation sheet and demand notice before the Madras High Court. The petitioner’s counsel argued that since no additions were proposed in the assessment order, the demand made through the computation sheet and notice was erroneous.
The court examined the assessment order and concurred with the petitioner’s contention. It observed that no additions were indeed proposed in relation to the issues mentioned in the assessment order. Consequently, the court ruled that the demand made through the computation sheet and demand notice could not be sustained.
The judgment rendered by the Madras High Court in the case of BVM Global Education Trust vs Assessment Unit reaffirms the principle that demands in computation sheets and notices must align with the findings of the assessment order. If no additions are proposed in the assessment order, demanding payment through such documents becomes untenable.
This ruling underscores the importance of meticulousness in income tax assessment procedures, emphasizing the need for coherence between assessment orders and subsequent demands.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
By this writ petition, the computation sheet dated 07.03.2024 and the consequential notice of demand dated 07.03.2024 are challenged.
2. The petitioner had filed the return of income for assessment year 2022-2023. By an intimation under Section 143(1) of the Income Tax Act, 1961, the return was processed and the refund claim was accepted. Thereafter, such assessment was selected for scrutiny. Pursuant thereto, assessment order dated 07.03.2024 was issued accepting the return of income and concluding that no addition is necessary. Since the petitioner was called upon to pay a sum of Rs.15,27,75,090/- by the computation sheet and demand notice, the present writ petition was filed.
3. Learned counsel for the petitioner invited my attention to the assessment order and pointed out that no addition was proposed in relation to the return of income filed by the petitioner. By referring to the computation sheet and the notice of demand, he points out that patent errors were committed while demanding a sum of Rs.15,27,75,090/-.
4. Mr. V. Mahalingam, learned senior standing counsel, accepts notice for the respondents. He submits that there appears to be a discrepancy when the assessment order and the impugned communications are compared.
5. On perusal of the assessment order, it is clear that it was concluded therein that no addition is being made in relation to the issues mentioned in paragraph 1 thereof. In those circumstances, the demand made in the computation sheet and the demand notice cannot be sustained.
6. Therefore, this writ petition is allowed by quashing the impugned computation sheet and the consequential notice of demand. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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