2023 (12) TMI 1200 - AT - Income Tax

Assessment order without DIN number in body loses validity despite separate communication of DIN

The ITAT Delhi held that an AO's order without a DIN number mentioned in its body loses validity. The tribunal found no DIN number or reason for its ... Document Identification Number (DIN) requirement in departmental communications - Validity of assessment order issued without DIN - Binding effect of CBDT Circular No.19/2019 on revenue authorities - Communication to be treated as invalid and deemed never to have been issued under paragraph 4 of the Circular - Exceptions permitting manual communication only with recorded reasons and prior written approval of CCIT/DGITDocument Identification Number (DIN) requirement in departmental communications - Validity of assessment order issued without DIN - Binding effect of CBDT Circular No.19/2019 on revenue authorities - Communication to be treated as invalid and deemed never to have been issued under paragraph 4 of the Circular - Exceptions permitting manual communication only with recorded reasons and prior written approval of CCIT/DGIT - Impugned assessment orders dated 31.12.2019 are invalid for non-compliance with CBDT Circular No.19/2019 by not quoting DIN or stating the prescribed reasons and approvals for manual issue. - HELD THAT: - The Tribunal examined CBDT Circular No.19/2019 which mandates that communications (including assessment orders) issued on or after 01.10.2019 must quote a computer-generated Document Identification Number (DIN) in the body of the communication. Paragraph 3 of the Circular permits limited exceptions for manual issuance, but only after recording reasons in the file and with prior written approval of the Chief Commissioner/Director General of Income-Tax, and requires the communication itself to state the specified reasons and approval particulars. Paragraph 4 declares any communication not in conformity with paragraphs 2 and 3 to be invalid and deemed never to have been issued. The Assessing Officer's orders of 31.12.2019 do not mention any DIN nor do they state the reasons/approvals prescribed by the Circular. In light of the Circular's object of creating an audit trail and its binding character on revenue authorities, the Tribunal, following the reasoning applied by the Delhi High Court in Brandix Mauritius Holdings Ltd. and by coordinate benches of the Tribunal, held that such non-compliant assessment orders lose their validity and must be quashed. Consequential factual enquiries about post hoc generation of DIN or administrative validation were held to be immaterial to the legal conclusion that the impugned orders, as issued, are non est in law. [Paras 10, 11]Impugned assessment orders dated 31.12.2019 are quashed as invalid for non-compliance with CBDT Circular No.19/2019.Final Conclusion: The assessee's appeals are allowed by quashing the AO's assessment orders dated 31.12.2019 for Assessment Years 2012-13, 2013-14 and 2014-15 for non-compliance with CBDT Circular No.19/2019; the Revenue's cross-appeal is dismissed and remaining grounds are rendered academic. Issues Involved:1. Validity of the assessment order due to the absence of a Document Identification Number (DIN).2. Compliance with CBDT Circular No. 19/2019.Summary:Validity of the Assessment Order Due to Absence of DIN:The primary issue raised by the assessee was the validity of the assessment orders dated 31.12.2019, passed under Section 143(3)/153C, due to the absence of a DIN. The assessee argued that the orders were void ab initio because they did not comply with the mandatory requirement of quoting a DIN as per CBDT Circular No. 19/2019. The counsel for the assessee cited several judgments, including CIT vs. Brandix Mauritius Holdings Ltd., to support this claim.The Revenue's representative contended that the absence of a DIN was an administrative issue and did not invalidate the proceedings. He argued that non-DIN communications could be validated through prescribed procedures and exceptions, and that the ITAT did not have the jurisdiction to adjudicate administrative issues.Compliance with CBDT Circular No. 19/2019:The Tribunal examined the contents of CBDT Circular No. 19/2019, which mandates that all communications, including assessment orders, must have a DIN unless issued under exceptional circumstances with prior written approval. The circular aims to create an audit trail and ensure transparency. Paragraph 4 of the circular specifies that any communication not conforming to these requirements shall be treated as invalid and deemed to have never been issued.The Tribunal found that the AO's order lacked a DIN and did not mention any reasons for its absence or any approval from higher authorities. Therefore, the order was not in compliance with the circular. The Tribunal referred to the Delhi High Court's decision in CIT vs. Brandix Mauritius Holdings Ltd., which held that any communication without a DIN is non-est in law.The Tribunal concluded that the assessment orders were invalid due to the absence of a DIN and quashed the impugned AO orders. Consequently, the other grounds raised by the assessee were rendered academic and did not require adjudication.Conclusion:The appeals filed by the assessee were allowed, and the appeal of the Revenue was dismissed. The Tribunal held that the assessment orders were invalid due to non-compliance with CBDT Circular No. 19/2019, specifically the absence of a DIN.