Tax orders without computer-generated DIN declared invalid and deemed never issued under CBDT Circular requirements

ITAT Nagpur admitted a legal ground raised for the first time before the Tribunal regarding non-quoting of computer-generated DIN in impugned orders. The Tribunal held that since no new facts required investigation and the omission was neither wilful nor unreasonable, the ground deserved admission citing SC and HC precedents. Following Bombay HC ruling in Ashok Commercial Enterprises, the Tribunal declared that orders issued without DIN are invalid and deemed never to have been issued. The impugned orders violated CBDT Circular requirements by lacking computer-generated DIN and requisite reasons/approvals, rendering them non-est in law.

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Issues Involved:
1. Non-quoting of computer-generated Document Identification Number (DIN) in the impugned orders.
2. Admissibility of a legal ground raised for the first time before the Tribunal.

Summary:

Non-quoting of DIN:
The core issue in these nineteen appeals (five by different assessees and fifteen by Revenue) revolves around the non-quoting of the computer-generated Document Identification Number (DIN) in the impugned orders. The assessees argued that the orders were communicated without mentioning DIN, violating Circular No.19/2019 issued by the Central Board of Direct Taxes (CBDT). The Revenue countered that DIN was communicated separately within 15 days, thus complying with the Circular.

Admissibility of Legal Ground:
The Tribunal first addressed whether the legal ground raised for the first time before it could be admitted. It concluded that since the legal ground challenges the validity of the impugned orders and does not require new facts to be investigated, it deserves admission. This decision was supported by precedents from the Hon'ble Apex Court and various High Courts.

Compliance with CBDT Circular:
The Tribunal examined the CBDT Circular No. 19/2019, which mandates the generation, allotment, and communication of DIN for all communications by income tax authorities. The Circular allows for manual communication under exceptional circumstances, provided reasons are recorded and prior approval is obtained. Any communication not conforming to these requirements is deemed invalid.

Judicial Precedents:
The Tribunal referred to several judicial precedents, including the Hon'ble Supreme Court's decision in 'K.P. Varghese vs. ITO' and 'Back Office IT Solutions Pvt. Ltd. vs. UOI', which emphasized that CBDT circulars bind the Revenue. The Tribunal also cited the Hon'ble Bombay High Court's ruling in 'Ashok Commercial Enterprises vs. ACIT', which held that orders issued without quoting DIN are invalid and deemed never to have been issued.

Conclusion:
The Tribunal concluded that the impugned orders were communicated without mentioning DIN and without stating the reasons for issuing DIN-less communication along with the required approvals. Therefore, the orders were deemed invalid and non-est. Consequently, the first five appeals by the assessees were allowed, and the remaining appeals by the Revenue were dismissed.

Pronouncement:
The orders were pronounced in open court on Tuesday, 31st October 2023.

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