Rectification nullifying a section 143(1) demand prevents the appellate confirmation of that demand from surviving.

A demand raised from processing a return under section 143(1) could not survive once a rectification order under section 154 had nullified that demand and left no outstanding liability for the relevant assessment year. On that basis, the appellate order confirming the same demand was unsustainable and was quashed. The Revenue accepted that the rectification had wiped out the demand, so there was no enforceable tax liability to sustain on appeal.

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Issues: Whether the demand arising from the intimation under section 143(1) of the Income-tax Act, 1961 could survive after rectification under section 154 had nullified the demand, and whether the appellate order confirming such demand could be sustained.

Analysis: The assessee's return had been processed under section 143(1), resulting in certain demands. A subsequent rectification order under section 154 wiped out those demands, leaving no outstanding liability for the relevant assessment year. Once the demand had been nullified by the rectification order, the appellate confirmation of the same demand could not stand. The Revenue accepted this position.

Conclusion: The demand could not be sustained after rectification, and the impugned appellate order was quashed in favour of the assessee.

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