HARISH KUMAR CHANDNANI,BHOPAL V. INCOME TAX OFFICER -3(1), BHOPAL, BHOPAL

ITA 107/IND/2025

AI Insights

The case revolves around a Notice of Demand issued by the AO against Harish Kumar Chandnani, who was the chairman of a society, for a hefty demand of Rs. 6,97,51,190. The assessment order was originally passed in the name of the society, not in the name of Chandnani. The primary legal contention was whether the AO could issue a Notice of Demand to an individual when the assessment order was passed in the name of a society. The Tribunal found that the Notice of Demand was improperly issued, leading to the quashing of the demand. The Tribunal also noted that the society had filed an independent appeal, which was still pending.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784503 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 21-01-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORREVENUEFILEDAOSLETTERDATED..INTHEMATTER; FORREVENUEHASNOTBEENABLETOSHOWANYOTHERPROVISIONIN; FORREVENUEINITIALLYSOUGHTTOOPPOSETHE; SHRIANOOPSINGH
• Assessee Lawyers: SHRIP.K.JAIN

Judgement Text

"Page 1 of 11 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.107/Ind/2025 Assessment Year:2012-13 Harish Kumar Chandnani, Sai Kripa Textiles, Main Road, Bairagarh, Bhopal बनाम/ Vs. ITO 3(1) Bhopal (Assessee/Appellant) (Revenue/Respondent) PAN: AFMPC2700G Assessee by Shri P.K. Jain, AR Revenue by Shri Anoop Singh, CIT-DR Date of Hearing 06.11.2025 Date of Pronouncement 11.11.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first appeal bearing DIN & Order No. ITBA/NFAC/S/250/2023-24/1060485199(1) dated 05.02.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] for AY 2012-13, the assessee has filed this appeal on the grounds as mentioned in Form No. 36 (Appeal Memo). 2. We have heard learned Representatives of both sides and carefully perused the case record. Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 2 of 11 3. The controversy which calls for our adjudication is very narrow and does not require much elaboration. The only relevant facts to be narrated are such that the AO passed assessment-order of a Society named “Swami Grah Nirman Sehkari Maryadit Co-operative Ltd., Bhopal”, the first-page and last two pages of assessment-order are scanned and re-produced below for an immediate reference: Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 3 of 11 Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 4 of 11 Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 5 of 11 Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 6 of 11 4. However, the AO issued Notice of Demand u/s 156 against “Shri Harish Kumar S/o Late Shri Bherumal”, Chairman of Society, who is the assessee/appellant in present case. The AO created a hefty demand of Rs. 6,97,51,190/- payable by assessee/appellant. The Notice of Demand so issued by AO is scanned and re-produced below for an immediate reference: Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 7 of 11 Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 8 of 11 5. Ld. AR invited our attention to the provision of section 156 under which the impugned Notice of Demand has been issued, reading as under: “Notice of demand. 156.(1) When any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the Assessing Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.” [emphasis supplied] 6. Ld. AR thereafter contended that the expressions “in consequence of any order passed under this Act” and “the assessee” used in above section 156 clearly refer to the “assessment-order” which had been passed and the “person” whose assessment-order had been passed. Therefore, when the aforesaid assessment-order was passed in the case of Society, how could the AO issue Notice of Demand against assessee/appellant. Ld. AR contended that there is no provision or authority prescribed in Income-tax Act, 1961 under which the AO’s action of issuing Notice of Demand against assessee/appellant could be said to be legal. Therefore, Ld. AR contended, the assessee/appellant is seriously prejudiced by AO’s action. He submitted that the assessee/appellant raised this serious grievance in Ground No. 2 of first-appeal before CIT(A) also but the Ld. CIT(A) has not adjudicated assessee’s ground; the CIT(A) has merely gone into the merit of assessment- order of Society passed by AO and upheld the same. 7. Ld. AR pointed out a further fact that the Society has filed an independent appeal against the impugned assessment-order passed by AO Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 9 of 11 against Society and the same is pending before CIT(A). He submitted that the present assessee/appellant is not concerned with the impugned assessment-order, he is making a limited prayer that the Notice of Demand issued by AO against him is not legal and must be quashed. 8. Ld. DR for revenue filed AO’s letter dated 03.11.2025 in the matter. He attempted to justify the action of AO by referring to Pages 3,4 & 6 of assessment-order and stating that the AO issued notices for/during assessment-proceeding to “Shri Harish Kumar S/o Late Shri Bherumal” i.e. the assessee/appellant in present case. However, Ld. DR was not against the fact that the assessment-order pertains to “Society” and not to assessee/appellant. Further, when the Bench raised a specific query as to what is the legal authority enabling the AO to issue Notice of Demand against assessee/appellant, he only submitted that it is a matter of record but, however, he could not show any such authority. 9. We have considered rival submissions of both sides and carefully perused the Assessment-order as well as the Notice of Demand; both of these documents are scanned and re-produced in earlier para. There are two undisputed facts, namely (i) the assessment-order pertains to and has been passed in the name of Society but (ii) the Notice of Demand has been issued in the name of assessee/appellant. On a careful consideration of provision of section 156, which we have re-produced earlier, we find that the identity of the assessee in the Assessment order and corresponding Notice of Demand demand-notice must be identical. There is no provision in section 156 Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 10 of 11 enabling the AO to issue Notice of Demand in the name of any person other than the person in whose name Assessment-order has been made. Further, the Ld. DR for revenue has not been able to show any other provision in Income-tax Act, 1961 to justify AO’s action. Accordingly, we hold that the Notice of Demand issued u/s 156 in the name of the name of assessee/appellant instead of the Society is invalid and unsustainable in the eyes of law. Consequently, we quash the impugned Notice of Demand issued by AO. 10. We, however, make it clear that we are not expressing any opinion qua the assessment-order which is issued in the correct name of the Society and therefore, the AO may, if permissible under law, issue a fresh Notice of Demand in the name of Society. 11. There was a delay of 266 days in filing present appeal by assessee. The assessee has filed a condonation-application supported by affidavit. The assessee has explained the reasoning of delay and making a prayer for condonation of same. Ld. DR for revenue initially sought to oppose the assessee’s prayer but when the bench pointed out that the Notice of Demand issued by AO creating a hefty demand of Rs. 6,97,51,190/- against assessee/appellant is illegal, Ld. DR understood the illegality of AO’s action and decided to drop his objection/opposition. Therefore, having regard to facts of case; the averments made by assessee in condonation-application/ affidavit and dropping of objection by Ld. DR, the delay is condoned. Printed from counselvise.com Harish Kumar Chandnani ITA No. 107/Ind/2025 – AY 2012-13 Page 11 of 11 12. Resultantly, this appeal is allowed. Order pronounced in open court on 11/11/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 11/11/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "