2022 (11) TMI 1379 - AT - Income Tax

Invalidity of CIT's Revision Order under Section 263 of Income Tax Act due to Missing DIN

RCC Institute of Technology 1 Versus CIT (Exemption), Kolkata

RCC Institute of Technology 1 Versus CIT (Exemption), Kolkata - TMI Issues Involved:1. Validity of the revision order passed by the CIT(Exemption) under Section 263 of the Income Tax Act due to non-mentioning of Document Identification Number (DIN).2. Compliance with CBDT Circular No. 19 of 2019 regarding the necessity of DIN in communications issued by the Income-tax Department.3. Binding nature of CBDT circulars on Income-tax Authorities.4. Judicial precedents on the invalidity of orders issued without DIN.Issue-wise Detailed Analysis:1. Validity of the Revision Order Passed by the CIT(Exemption) under Section 263 of the Income Tax Act:The primary issue contested by the assessee was the validity of the revision order dated 31.03.2021 passed by the CIT(Exemption) under Section 263 of the Income Tax Act. The assessee argued that the order was null and void due to the absence of a Document Identification Number (DIN) in the body of the order, which violated CBDT Circular No. 19 of 2019. The Tribunal adjudicated this legal issue first, as it was determinative of the very validity of the impugned revision order.2. Compliance with CBDT Circular No. 19 of 2019 Regarding the Necessity of DIN in Communications Issued by the Income-tax Department:The assessee's counsel referred to CBDT Circular No. 19 of 2019, which mandates that all communications issued by the Income-tax Department, including orders, must contain a DIN. The circular states that any communication issued without a DIN shall be treated as invalid and deemed to have never been issued unless issued under exceptional circumstances with prior approval. The Tribunal noted that the impugned order did not mention the DIN, nor did it state any exceptional circumstances or obtain the necessary approvals as required by the circular.3. Binding Nature of CBDT Circulars on Income-tax Authorities:The Tribunal emphasized the binding nature of CBDT circulars on Income-tax Authorities, citing several judicial precedents. The Supreme Court in CIT v. Hero Cycles [1997] 228 ITR 463 (SC) and UCO Bank [1999] 237 ITR 889 (SC) held that circulars issued by the CBDT are binding on the Income-tax Authorities. The Tribunal also referred to the decisions of the Andhra Pradesh High Court in Nayana P. Dedhia [2004] 270 ITR 572 (AP) and the Chhattisgarh High Court in DCIT v. Sunita Finlease Ltd. [2011] 330 ITR 491 (CG), which reiterated the binding nature of such circulars.4. Judicial Precedents on the Invalidity of Orders Issued Without DIN:The Tribunal relied on the decision of the Coordinate Kolkata Bench in Tata Medical Centre Trust vs. CIT, which held that an order issued without a DIN is invalid and deemed to have never been issued. The Tribunal also referred to the Supreme Court's judgment in Pradeep Goyel vs. UOI, which highlighted the importance of DIN for transparency and accountability in tax administration. The Tribunal noted that the impugned order did not meet the criteria set out in the CBDT circular, making it invalid.Conclusion:The Tribunal concluded that the impugned order passed by the CIT(Exemption) was invalid due to the absence of a DIN, as required by CBDT Circular No. 19 of 2019. The Tribunal quashed the order on this legal ground, rendering the merits of the case academic. The appeal of the assessee was allowed, and the impugned revision order was deemed to have never been issued.