Sanctioned scheme concessions must be applied before any tax demand is worked out and a fresh demand raised, if any

A demand for the assessment year was required to be kept in abeyance because the sanctioned scheme dated 14.01.2003, as clarified by the order dated 07.08.2006, had not first been given effect to. The Revenue did not dispute that the concessions under the scheme had to be considered before any demand was worked out. The respondents were therefore directed to examine the scheme concessions and, only thereafter, raise a fresh demand if any amount remained payable.

---

---

Issues: Whether the demand raised for the assessment year was liable to be kept in abeyance and reconsidered after giving effect to the sanctioned scheme dated 14.01.2003 and the clarificatory order dated 07.08.2006.

Analysis: The demand was stated to have been raised without first giving effect to the mandate of the sanctioned scheme. The Revenue did not dispute that the concessions under the scheme had to be considered before any demand was worked out. In view of the agreed position, the respondents were required to consider the concessions under the scheme and a fresh demand, if any, could be raised thereafter.

Outcome: The impugned demand was directed to remain in abeyance and the respondents were directed to consider the scheme before proceeding further.

---