2023 (11) TMI 861 - AT - Income Tax

Assessment order invalid without DIN quoted before signing by Assessing Officer, subsequent generation irrelevant

ITAT Delhi held that an assessment order passed by AO without quoting Document Identification Number (DIN) is invalid, even if DIN was generated ... Validity of assessment order without DIN - CBDT Circular No.19/2019 - mandatory Document Identification Number (DIN) - Communication treated as invalid if not in conformity with the Circular - Binding force of CBDT circular issued under section 119 - Audit-trail requirement for departmental communicationsValidity of assessment order without DIN - CBDT Circular No.19/2019 - mandatory Document Identification Number (DIN) - Communication treated as invalid if not in conformity with the Circular - Whether the assessment order dated 27.12.2019, which does not quote a computer-generated DIN in its body and does not record the reasons/approval required by CBDT Circular No.19/2019, is valid - HELD THAT: - The Tribunal examined CBDT Circular No.19/2019 which mandates that, on or after 1 October 2019, no communication relating to assessment or orders shall be issued unless a computer-generated DIN is allotted and quoted in the body of the communication. Paragraph 3 carves out limited exceptions where manual communication may be issued only after recording reasons in the file and obtaining prior written approval of the Chief Commissioner/Director General; such manual communications must state the specified format and the approval number/date. Paragraph 4 declares any communication not in conformity with paras 2 and 3 to be invalid and to be deemed never issued. Circulars issued under section 119 are binding on revenue authorities. The AO's order contains no DIN, nor does it state the reasons or approval required by the Circular; a subsequent generation or separate communication of a DIN was held to be a superfluous act that cannot validate an order which lacked the DIN and required statement at the time of issuance. Applying the Circular and the binding force accorded to it, the Tribunal concluded that the impugned assessment order is non-est in law and must be quashed. [Paras 6, 7, 9]The assessment order dated 27.12.2019 is invalid and shall be deemed to have never been passed; the impugned AO order is quashed.Final Conclusion: The appeal is allowed: the assessment order for Assessment Year 2018-19 dated 27.12.2019, which does not comply with CBDT Circular No.19/2019 by quoting DIN and the prescribed statement/approval, is held invalid and is quashed. Issues Involved:1. Validity of the assessment order due to non-compliance with CBDT Circular No.19/2019 requiring mandatory DIN.Summary:Issue 1: Validity of the Assessment Order Due to Non-Compliance with CBDT Circular No.19/2019 Requiring Mandatory DINThe primary issue raised by the assessee was the validity of the assessment order dated 27.12.2019, which lacked the mandatory Document Identification Number (DIN) as required by CBDT Circular No.19/2019 dated 14th August 2019. The assessee argued that the absence of DIN rendered the assessment order void ab initio, thereby invalidating the jurisdiction assumed by the Assessing Officer (AO).The Tribunal examined the contents of CBDT Circular No.19/2019, which mandates that no communication shall be issued by any income-tax authority without a computer-generated DIN. The circular specifies that in exceptional circumstances, communications may be issued manually but must include the reasons for not generating a DIN and must have prior written approval from the Chief Commissioner/Director General of Income-tax. Paragraph 4 of the circular explicitly states that any communication not conforming to these requirements shall be treated as invalid and deemed never to have been issued.Upon review, the Tribunal found that the AO's order did not mention a DIN nor provided reasons for its absence, nor did it include the required approval. This non-compliance with the circular rendered the AO's order invalid. The Tribunal referenced the Delhi High Court's decision in CIT vs Brandix Mauritius Holdings Ltd. (2023)(4) TMI 579 (Delhi High Court), which upheld that communications without a DIN are non-est in law and that circulars issued under Section 119 of the Act are binding on the revenue authorities.The Tribunal also considered the case of Abhimanyu Chaturvedi vs DCIT, where it was held that the generation of a DIN is a condition precedent for making an assessment manually or otherwise, and an order without a DIN is non-est. The Tribunal concluded that the simultaneous issuance of a DIN number without mentioning it in the body of the communication is insignificant and a superfluous exercise.As a result, the Tribunal quashed the AO's order for non-compliance with the mandatory DIN requirement, rendering the rest of the grounds academic and not requiring adjudication.In conclusion, the appeal filed by the assessee was allowed, and the assessment order was deemed invalid and quashed.Order pronounced in the open court on this 20th day of November, 2023.