2023 (10) TMI 126 - AT - Income Tax

Assessment order invalidated for non-compliance with DIN circular; Commissioner's order set aside; Revenue's appeal dismissed

Rama Pashu Aahar (P) Ltd., C/o RRA Taxindia, Versus ACIT, Central Circle 14, New Delhi. (vice versa)

The Tribunal held that the assessment order was invalid and deemed to have never been issued due to non-compliance with the CBDT circular requiring a ... Validity of the assessment order as it does not contain computer generated Document Identification Number (DIN) - Rejection of assessment order manually without DIN - No reasons were recorded by the AO - HELD THAT:- It is fairly well settled, a circular issued u/s. 119 of the Act has statutory force and is binding on subordinate authorities working under the CBDT. A perusal of the impugned assessment order makes it clear that in the body of the assessment order, the Assessing Officer has neither recorded the reasons for issuing the assessment order manually without DIN nor the date and number of approval of the Chief Commissioner/Director General of Income-tax. Therefore, even assuming that the Assessing Officer might have generated the DIN or had obtained approval of the concerned authority, however, since he has not incorporated the reasons of issuing the assessment order manually without DIN and date and number of approval in the body of assessment order, it does not comply with the conditions of paragraph 3 of the extant circular. Thus, in such a situation, as per paragraph 4 of the said circular, the assessment order has to be treated as invalid and shall be deemed to have never been issued. Thus as relying on BRANDIX MAURITIUS HOLDINGS LTD. [2023 (4) TMI 579 - DELHI HIGH COURT] and paragraph 4 of the circular No. 19/2019 dated 14.08.2019 the impugned assessment order is invalid and shall be deemed to have never been issued. Decided in favour of assessee. Issues Involved:1. Validity of the assessment order due to the absence of a Document Identification Number (DIN).Summary:Validity of the Assessment Order:The primary issue in the assessee's appeal was the validity of the assessment order dated 31.12.2019, which did not contain a Document Identification Number (DIN). The assessee argued that according to Circular No. 19/2019 issued by the Central Board of Direct Taxes (CBDT), any communication from the Income-tax authority after 1st October 2019 must include a computer-generated DIN. The circular also specifies that in exceptional circumstances, a manual communication can be issued, but it must record reasons in writing and obtain prior written approval from the Chief Commissioner/Director General of Income-tax. The assessee contended that the assessment order did not meet these requirements and should be deemed invalid.The Revenue countered that the assessment order was issued manually due to technical difficulties, and the DIN was generated within 15 working days as per paragraph 5 of the CBDT circular. However, the Tribunal found that the assessment order did not include the required reasons for manual issuance or the date and number of approval from the Chief Commissioner/Director General of Income-tax, thus failing to comply with the conditions of the circular.The Tribunal referred to the CBDT Circular No. 19/2019, which mandates that any communication not conforming to its provisions shall be treated as invalid and deemed to have never been issued. The Tribunal also cited the Delhi High Court's decision in CIT vs. Brandix Mauritius Holdings Ltd., which reinforced the binding nature of CBDT circulars under Section 119 of the Income-tax Act.Conclusion:The Tribunal held that the impugned assessment order was invalid and deemed to have never been issued due to non-compliance with the CBDT circular. Consequently, the order of the Commissioner (Appeals) was set aside. The Tribunal did not adjudicate the remaining grounds raised by the assessee, as they became academic. The Revenue's appeal was dismissed as infructuous. The assessee's appeal was allowed, and the Revenue's appeal was dismissed.Order Pronouncement:The order was pronounced in the open court on 30/05/2023.