DRP order invalid without mandatory DIN in communication body despite separate DIN generation

ITAT DELHI held that DRP directions issued without mentioning mandatory DIN in the order body are invalid, despite subsequent DIN generation being communicated separately. Following precedents from Delhi HC and Bombay HC, the tribunal ruled that CBDT Circular requirements mandate DIN inclusion in communication body unless exceptional circumstances exist with prior approval. Since Revenue failed to demonstrate exceptional circumstances for DIN omission, the DRP order and consequent assessment order under Section 143(3) read with Section 144C(13) were deemed invalid and never issued.

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Issues Involved:
1. Validity of the DRP Directions without Document Identification Number (DIN).
2. Validity of the final assessment order based on invalid DRP directions.

Summary:

Issue 1: Validity of the DRP Directions without Document Identification Number (DIN)
The assessee raised an additional ground challenging the validity of the DRP directions dated 07.06.2022, arguing that the directions were issued without a valid DIN, contrary to CBDT Circular No. 19 of 2019. The Tribunal admitted this additional ground as it was purely a legal issue. The assessee's counsel contended that the absence of a DIN in the body of the DRP directions rendered them invalid, referencing the jurisdictional High Court's decision in Brandix Mauritius Holdings Ltd. vs. DCIT, which held that communications without a DIN are non-est in law. The Department argued that the DIN was generated when the directions were uploaded on 07.06.2022 and communicated to the assessee via a separate letter on 17.06.2022. However, the Tribunal noted that the DRP directions did not mention the DIN, and subsequent generation of DIN did not comply with the CBDT Circular's requirements.

Issue 2: Validity of the Final Assessment Order Based on Invalid DRP Directions
The Tribunal examined whether the subsequent generation of DIN sufficed under the CBDT Circular, which mandates quoting DIN in the body of the communication/order. The Tribunal referred to multiple judicial precedents, including decisions from the Delhi High Court and Bombay High Court, which consistently held that communications/orders without a DIN in the body are invalid. The Tribunal concluded that the DRP directions were invalid due to the absence of a DIN, and consequently, the final assessment order based on these invalid directions was also deemed never to have been issued and thus bad in law.

Conclusion:
The Tribunal set aside the assessment order passed by the Assessing Officer under section 143(3) read with section 144C(13) of the Income Tax Act, 1961, pursuant to the invalid DRP directions. It held that the absence of a DIN in the DRP directions rendered them invalid, and the final assessment order based on such directions was also invalid. The appeal of the assessee was partly allowed on this preliminary issue, and the Tribunal did not address the merits of the additions.

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