Tribunal quashes order for lack of Document Identification Number (DIN) and non-compliance with circular

The Tribunal found the order under Section 263 invalid as it lacked a Document Identification Number (DIN) and did not comply with CBDT Circular No. 19/2019. The order was deemed to have never been issued, following precedent that manual orders must adhere to circular requirements. The appeal was allowed, quashing the order due to non-compliance with the circular, emphasizing the necessity of procedural adherence in tax administration.

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Issues Involved:
1. Validity of the order under Section 263 of the Income-tax Act due to the absence of a Document Identification Number (DIN).
2. Compliance with the Central Board of Direct Taxes (CBDT) Circular No. 19/2019.
3. Procedural adherence for issuing manual orders without a DIN.

Detailed Analysis:

1. Validity of the Order under Section 263:
The principal issue was whether the order under Section 263 of the Income-tax Act, issued by the Principal Commissioner of Income Tax (PCIT), was valid given that it did not contain a Document Identification Number (DIN). The assessee argued that the absence of a DIN rendered the order invalid and non-est, as per the instructions of CBDT Circular No. 19/2019 dated 14.08.2019. The Tribunal examined whether the procedural requirements for issuing a manual order without a DIN were met.

2. Compliance with CBDT Circular No. 19/2019:
The Tribunal referred to the CBDT Circular No. 19/2019, which mandates that no communication shall be issued by any income-tax authority unless a computer-generated DIN has been allotted and quoted in the body of such communication. The circular allows for exceptions under specific circumstances, but these must be documented, and the communication must state that it is issued manually without a DIN, along with the approval details from the Chief Commissioner/Director General of Income-tax.

3. Procedural Adherence for Issuing Manual Orders:
The Tribunal noted that the PCIT issued the order under Section 263 manually and subsequently issued an intimation with the DIN on the same date. However, the order itself did not contain the DIN or the necessary statements as required by the CBDT Circular. The Tribunal emphasized that generating the DIN by separate intimation is permissible only to regularize a manual order, provided the manual order is issued following the procedures outlined in Para 3 of the circular.

Tribunal's Findings:
- The Tribunal found that the order under Section 263 neither contained the DIN in its body nor mentioned the fact that it was issued manually without a DIN after obtaining the necessary approvals.
- The Tribunal referenced similar cases, including the decision in Dilip Kothari v. CCIT, where it was held that an order issued manually without adhering to the CBDT Circular's requirements is invalid and deemed to have never been issued.
- The Tribunal concluded that the impugned order was not in conformity with Para 2 and Para 3 of the CBDT Circular No. 19/2019. Consequently, the order under Section 263 was invalid and deemed to have never been issued.

Conclusion:
The appeal by the assessee was allowed, and the order passed under Section 263 was quashed on the grounds of non-compliance with the CBDT Circular No. 19/2019, specifically the absence of a DIN and the failure to follow the prescribed procedures for issuing a manual order. The Tribunal's decision underscores the importance of adhering to procedural requirements and maintaining transparency in tax administration.

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