Assessment orders issued without Document Identification Number held invalid pending CBDT response on circular exceptions

The Bombay HC examined the validity of assessment orders issued without Document Identification Number (DIN) under CBDT Circular No.19/2019. Following the precedent in Ashok Commercial Enterprises case which held such orders invalid, the Court noted interpretative questions regarding the circular's scope and exceptions. The HC granted leave to implead CBDT as necessary party respondent to address all contentions on DIN applicability. The Court stayed the impugned assessment order and related demand/penalty proceedings until further hearing, with matter adjourned to allow CBDT's response on the interpretative issues.

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Issues:
Challenge to assessment order issued without Document Identification Number (DIN) as per Circular No. 19/2019 by CBDT.

Analysis:
The primary contention in the petition is that the assessment order dated 31 March 2023 was issued without the petitioner being provided with the Document Identification Number (DIN), which is required as per Circular No. 19/2019 issued by the Central Board of Direct Taxes (CBDT). The petitioner argues that the assessment order should be deemed invalid and illegal based on the provisions of the circular, specifically paragraph 4, which states that any communication not conforming to the DIN requirement shall be treated as invalid. The petitioner relies on a previous court decision where a similar issue was considered, leading to the assessment order being declared invalid due to the absence of a DIN. The court notes the need to clarify whether the term "order" in the circular includes the "assessment order" and whether paragraph 4 overrides the exceptions mentioned in paragraph 3 of the circular. It is decided that the CBDT should be added as a necessary party to address all contentions on this issue comprehensively.

The court grants leave to the petitioner to amend the petition to include the CBDT as a party respondent and issues notice to the CBDT. The petitioner is directed to make the necessary amendments by a specified date, and the CBDT is required to file a reply affidavit addressing the issues raised before the next hearing date. The impugned assessment order and related proceedings of demand and penalty are stayed until the adjourned date of the hearing to ensure justice for the petitioner.

One of the judges makes observations regarding the need for the CBDT to clarify the extended scope of the circular dated 14 August 2019 in ensuring the integrity of tax administration. It is suggested that every instrument issued in the tax administration process should have a digital identity, which the CBDT should provide clarity on. Additionally, the respondent is directed to submit a proper affidavit with legible annexures within two weeks to ensure all necessary documents are accessible and clear for the court's consideration.

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