Tax recovery based on wrong computation sheet stayed when in Assessment order tax was Nil

Tax recovery on the basis of wrong computation sheet stayed as tax liability was NIL as per Assessment Order

In a recent judgment, the Hon’ble Andhra Pradesh High Court stayed recovery of tax on the basis of wrong computation sheet when returned income was accepted and as per Assessment Order the tax liability was NIL

ABCAUS Case Law Citation:
ABCAUS 4030 (2024) (05) HC

In the instant case, the assessee/Petitioner had filed a Writ Petition before the Hon’ble High Court. The assessee was aggrieved by the issue of recovery towards income tax despite that as per the Assessment Order, the tax liability was NIL.

Before the Hon’ble High Court, the Petitioner submitted that in the Assessment Order, the returned income of the assessee was accepted as assessed income, and as per the Assessment Order passed under section 143(3) of the Income Tax Act, 1961 (the Act), the tax liability was NIL, however, as computation sheet was not rectified the recovery had been issued.

It was further submitted that he had also filed a rectification application u/s 154 of the Act for rectification in the computation sheet which was pending before the Assessing Officer.

The Hon’ble High Court admitted the Petition and as an interim measure directed that no recovery shall be made pursuant only to the computation sheet.

The Assessing Officer was also directed to consider and decide the application u/s 154.

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