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

The ITAT Delhi held that assessment orders without Document Identification Number (DIN) mentioned on the body are invalid and deemed never issued, as per CBDT Circular dated 14/08/2019. The tribunal ruled that Board circulars are binding on revenue authorities without exception, and non-compliance with DIN requirements is not merely a procedural violation but vitiates the entire communication. The subsequent generation of DIN in ITBA system cannot cure this defect as it is only a post-assessment action. The assessment order becomes voidable at the assessee's instance regardless of proving prejudice. Decision favored the assessee against revenue.

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Issues Involved:
1. Illegality of assessment orders due to absence of Document Identification Number (DIN).
2. Compliance with CBDT Circular No. 19/2019.
3. Binding nature of CBDT Circulars on Revenue Authorities.

Summary:

Illegality of Assessment Orders Due to Absence of DIN:
The Tribunal examined whether the absence of DIN on the body of assessment orders rendered them illegal. The appellant argued that the orders did not contain DIN, making them non est and without consequential effect. The Tribunal noted that the law regarding the necessity of DIN on departmental communications is settled by the Hon'ble Jurisdictional High Court in the case of Brandix Mauritius Holdings Ltd. (149 taxmann.com 238 (Delhi) 2023), which supports the appellant's contention.

Compliance with CBDT Circular No. 19/2019:
The Tribunal reviewed 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 also specifies that any communication issued manually must state the reason for not quoting DIN and must be approved by the Chief Commissioner/Director General of Income Tax. The Circular further states that any communication not in conformity with these requirements shall be treated as invalid and deemed to have never been issued.

The Tribunal found that the assessment orders in question did not comply with the Circular as they did not mention DIN on their body. The Tribunal emphasized that the Circular is binding on Revenue Authorities, and non-compliance results in the communication being void ab initio.

Binding Nature of CBDT Circulars on Revenue Authorities:
The Tribunal held that CBDT Circulars issued under Section 119 of the Income-tax Act are binding on all officers and persons employed in the execution of the Act. The Tribunal referred to the Hon'ble Delhi High Court's judgment in Brandix Mauritius Holdings Ltd., which confirmed that circulars are legally binding on the Revenue, even if they deviate from the provisions of the Act.

The Tribunal dismissed the Revenue's argument that the Circular is merely a procedural guideline and not a statutory requirement. The Tribunal reiterated that the Circular is binding and non-compliance results in the assessment order being deemed as never issued.

Conclusion:
The Tribunal concluded that the absence of DIN on the body of the assessment orders rendered them invalid. The appeals of the Revenue were dismissed, and the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) in favor of the assessee. The Tribunal emphasized that the CBDT Circular No. 19/2019 is binding on Revenue Authorities and non-compliance with its provisions results in the communication being void ab initio.

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