Can I dispute an income tax demand I believe is incorrect?

Yes, you have the right to appeal an assessment order you believe is incorrect. The first level of appeal is typically to the Commissioner of Income Tax (Appeals), where you can present your case with supporting documents and explanations for why you believe the assessment is wrong.

If you're still unsatisfied after that first appeal, you can further appeal to the Income Tax Appellate Tribunal, and beyond that, on substantial questions of law, to the High Court and ultimately the Supreme Court, though most disputes are resolved at the earlier stages.

Each level of appeal has its own specific, generally strict timeline within which you must file, so it's important not to delay. It would be advisable to consult a tax professional or lawyer promptly, both to assess the actual merits of your dispute (since correcting a genuine calculation error can sometimes be resolved through simpler rectification requests) and to ensure any appeal is filed correctly and on time.