2023 (8) TMI 378 - AT - Income Tax

Tribunal Quashes Assessment Orders for Lack of Required Document Identification Number, Appeals Favored for Assessee.

The Tribunal determined that the assessment orders were non-est due to the absence of a Document Identification Number (DIN) before signing, as required ... Validity of assessment passed under Section 153A/143(3) of the Income tax Act - Validity of assessment order lacking Document Identification Number (DIN) - Binding effect of CBDT Circular No. 19/2019 on issuance of communications by the Income tax Department - Manual issuance of communication and exceptional circumstances in Circular No. 19/2019 - Requirement of generation and quoting of DIN prior to signing/uploading manual orders on ITBA - Effect of incomplete order uploaded on ITBA on limitation to challenge versus validity of the assessmentValidity of assessment order lacking Document Identification Number (DIN) - Binding effect of CBDT Circular No. 19/2019 on issuance of communications by the Income tax Department - Requirement of generation and quoting of DIN prior to signing/uploading manual orders on ITBA - Assessment orders dated 09.08.2021 which did not bear DIN on their face are invalid and deemed to have never been issued. - HELD THAT: - The Tribunal examined CBDT Circular No. 19/2019 and the Directorate instructions of 25.10.2019 and concluded that the Circular makes the quoting of a computer generated DIN on the face of every 'communication' mandatory except in specified exceptions which require prior written approval and specified wording on the communication. The assessing officer admitted the orders were prepared manually and uploaded later, and the DIN was generated after upload; the orders themselves did not record the exceptional circumstances or prior approval required by the Circular. The ITBA instructions further make generation and quoting of DIN a condition precedent when a document is prepared outside the system and require the DIN to be quoted and the document signed after quoting. Generation of an intimation or subsequent communication of DIN does not cure the absence of DIN on the assessment order itself. The Tribunal followed its coordinate Bench and the Delhi High Court in holding that non compliance with the Circular renders the communication invalid and deemed never to have been issued, and applied that principle to set aside the impugned assessment orders. [Paras 15, 16, 17, 18, 20]Assessment orders lacking DIN on their face are non est and invalid; this ground is decided in favour of the appellants.Effect of incomplete order uploaded on ITBA on limitation to challenge versus validity of the assessment - Validity of assessment passed under Section 153A/143(3) of the Income tax Act - Incomplete upload of the assessment order on ITBA does not render the assessment void, though it may affect the commencement of limitation for challenging the order. - HELD THAT: - The Tribunal found that only 4-9 pages of the long assessment order appeared on ITBA, which likely resulted from a system glitch. An incomplete or illegible copy supplied to the assessee affects the point from which limitation for filing appeals would run but does not invalidate an otherwise complete assessment signed within the prescribed period. Citing principles that an order must be communicated to be operative and earlier authorities on communication and limitation, the Bench held that incomplete upload may extend the period for filing appeal but does not make the assessment void. Accordingly, on this issue the decision is against the assessee. [Paras 11, 19, 20]Incomplete or partial upload on ITBA may delay the start of limitation for preferring appeals but does not by itself invalidate the assessment order; this issue is decided against the appellants.Final Conclusion: The Tribunal set aside the impugned assessment orders for A.Y. 2013 14 as non est on account of failure to quote DIN on the orders as required by CBDT Circular No.19/2019; the contention that incomplete upload on ITBA invalidates the assessment was rejected (it may only affect limitation). The appeals are allowed and the demands based on the non est orders are quashed. Issues Involved:1. Legality of the assessment orders due to absence of Document Identification Number (DIN).2. Completeness and timing of assessment orders uploaded on ITBA portal.Summary:Issue 1: Legality of the assessment orders due to absence of Document Identification Number (DIN):The Tribunal examined whether the assessment orders were invalid due to the absence of DIN. The Tribunal referred to CBDT Circular No. 19/2019, which mandates that all communications, including assessment orders, must have a DIN unless issued under exceptional circumstances with prior approval. The Tribunal found that the assessment orders did not mention any reasons for manual issuance or any approval from the Chief Commissioner/Director General of Income Tax. The orders were signed without a DIN, which was generated only after uploading the orders on ITBA. The Tribunal concluded that the orders were non-est as they did not comply with the mandatory requirement of quoting a DIN before signing. The Tribunal relied on the judgment of the Delhi High Court in CIT vs. Brandix Mauritius Holdings Ltd., which held that orders without DIN are invalid and deemed to have never been issued. The Tribunal decided this issue in favor of the assessee, declaring the assessment orders non-est.Issue 2: Completeness and timing of assessment orders uploaded on ITBA portal:The Tribunal also examined whether the assessment orders were incomplete when uploaded on ITBA and whether they were passed after the limitation period. The Tribunal noted that the orders uploaded on ITBA were incomplete, with only 4 or 9 pages, while the complete orders were over 270 pages. However, the Tribunal held that the service of incomplete orders on ITBA does not invalidate the orders themselves. The Tribunal stated that the actual service of the orders may be beyond the prescribed period, but this only affects the start of the limitation period for filing an appeal, not the validity of the orders. The Tribunal cited the Supreme Court's judgment in Raja Harish Chandra Raj Singh vs. Dy. Land Acquisition Officer, which held that an order must be communicated to the affected party to be complete and effective. The Tribunal decided this issue against the assessee, holding that the orders were not void on the ground of incomplete service on ITBA.Conclusion:Since the Tribunal decided the first issue in favor of the assessee, declaring the assessment orders non-est, it quashed the impugned demand based on these orders. The Tribunal did not address the other grounds on merits, as they became superfluous. The appeals were allowed, and the impugned demand was quashed.