2024 (1) TMI 1222 - AT - Income Tax

Assessment orders without Document Identification Number invalid and deemed never issued under CBDT Circular

The ITAT Delhi held that assessment orders without Document Identification Number (DIN) are invalid and deemed never issued per CBDT Circular dated ... Validity of assessment orders without quoting DIN - validity of subsequent generation of the DIN - Application of Board’s circular - principles of functional or purposeful interpretation - HELD THAT:- As decided in Abhinav Chaturvedi and others[2023 (8) TMI 378 - ITAT DELHI] forwarding of the intimation of generation of the DIN in ITBA is only a subsequent action and that is not part of assessment order. The manner in which the word 'communication' is defined shows every notice, order, summons, letter and any correspondence from Tax authorities should have a DIN quoted and it is for this reason that the Intimation issued about the DIN of assessment order itself has a DIN quoted on it Board’s circular application - Argument raised is against now crystallized proposition of law that as far as the Circulars of the Board are concerned, they are binding upon the officers of the Revenue Department without any exceptions whatsoever. Once it is concluded that the Circular of the Board is binding upon the Revenue Authorities, then, its non-compliance brings the consequences which the Board Circular itself manifests and it is that the ‘communication’, which in the present case is ‘assessment order’ will be deemed to have been never issued. Thus, when Board lays down what shall be the format of any such ‘communication’ and also provides that if the ‘communication’ is not in that format the same will be considered as not issued at all, then it is not a mere technical flaw liable to be corrected but it vitiates the communication, i.e the ‘assessment order’ in the present form. Once assessee has a statuary right to be conveyed such ‘communication’, as far as the immediate consequences of the communication not bearing DIN is concerned, as the same is presumed to have never been issued, such communication has no legal foundation left and becomes a voidable communication at the instance of the assessee, irrespective of assessee establishing the plea of prejudice. The difference pointed out in the passing of an order and issuing communication of order is very much clarified by the Circular as the word ‘communication’ has been primarily used in the sense of a ‘Noun’, specifying what all sorts of orders, notices etc. will require DIN on the body. It is not used in the form of a ‘verb’ indicating the mode of transmission of information or delivery or transmitting a copy thereof as ‘service of the notice’ referred u/s 282 of the Act. Thus to say that there is merely an improper manner of service and such rigour is mitigated by Section 292BB is quite misconceived. See BRANDIX MAURITIUS HOLDINGS LTD. [2023 (4) TMI 579 - DELHI HIGH COURT] This ground is allowed as the assessment order in question is invalid and is deemed to have never been issued as per the CBDT Circular dated 14/08/2019(supra) for non-mentioning of DIN on the body of the order. Issues Involved:1. Legality of the assessment order due to the absence of Document Identification Number (DIN).2. The sustainability of the assessment order on various legal and factual grounds.Summary of Judgment:Issue 1: Legality of the Assessment Order Due to Absence of DIN- The assessee argued that the assessment order dated 31.12.2019 was illegal and bad in law since it was passed without a DIN, referencing judgments from various High Courts and CBDT Circular No. 19/2019.- The Tribunal admitted the additional grounds raised by the assessee, considering it a pure question of law settled by the Hon'ble Jurisdictional High Court in the case of Brandix Mauritius Holdings Ltd.- The Department contended that the provision for DIN is by way of a Circular and not an amendment to the Act, arguing that the absence of DIN does not make the order void ab initio unless prejudice to the assessee is demonstrated.- The Tribunal referred to its previous decision in the case of Abhinav Chaturvedi, emphasizing that the Circular is binding on Revenue officers and non-compliance renders the communication invalid.- The Tribunal concluded that the assessment order without a DIN is deemed never to have been issued as per CBDT Circular No. 19/2019, thus invalidating the assessment order.Issue 2: Sustainability of the Assessment Order on Various Legal and Factual Grounds- The Tribunal did not adjudicate on other grounds raised by the assessee as the assessment order was already set aside due to the absence of DIN.- The appeals of the assessee were allowed, and the assessment order was set aside.- Consequently, the cross-appeal of the Revenue was rendered infructuous and dismissed.Conclusion:- The Tribunal ruled in favor of the assessee, setting aside the assessment order for non-compliance with the CBDT Circular regarding DIN.- The other grounds of appeal were not addressed as the primary issue of DIN absence invalidated the assessment order.- The cross-appeal by the Revenue was dismissed as infructuous.