Court rules in favor of petitioner, finding no legitimate tax demand. Respondents restrained from recovery actions.

The court, after considering the petitioner's claims of harassment by the Income Tax Department and the subsequent rectification orders leading to higher demands, found no legitimate tax demand against the petitioner. A notice was issued to the respondents, and the senior Standing counsel accepted it, with directions to examine the matter. The respondents were restrained from taking any recovery steps regarding the disputed demand. The case was scheduled for further proceedings with instructions for order dissemination and provision to counsel.

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Issues:
1. Alleged harassment by Income Tax Department
2. Denial of credit of TDS amount
3. Higher demand due to alleged non-payment of 'Self Assessment Tax'
4. Rectification orders and fresh demands
5. Legitimacy of tax demand against the petitioner

Analysis:
The petitioner filed a writ petition under Article 226 of the Constitution, claiming harassment by the Income Tax Department. The respondents initially denied the credit of TDS amount but later, upon objection by the petitioner, issued a rectification order allowing the credit. However, a higher demand was created alleging non-payment of 'Self Assessment Tax'. Subsequent rectification orders were issued, raising fresh demands based on the addition of a donated amount. The Court observed that there seems to be no legitimate tax demand against the petitioner, leading to the issuance of a notice to the respondents.

The learned senior Standing counsel for respondents accepted the notice and was directed to examine the matter. A status report was ordered to be filed within two weeks, and the petitioner was granted the opportunity to file a rejoinder affidavit before the next hearing date. In the interim, the respondents were restrained from taking any steps to recover the impugned demand mentioned in the Intimation-Cum-Demand Notice issued under Section 143(1) of the Income Tax Act, 1961. The case was listed for further proceedings on 30th June, 2020, with instructions to upload the order on the website and provide a copy to the counsel via e-mail.

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