2024 (9) TMI 375 - HC - Income Tax

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 ... Assessment order provided without quoting Document Identification Number (“DIN”) - scope of CBDT Circular No.19/2019 dated 14 August 2019 - HELD THAT:- The Court in Ashok Commercial Enterprises [2023 (9) TMI 335 - BOMBAY HIGH COURT] considering the purport of the circular dated 14 August 2019 (supra) and more particularly paragraph 4 thereof, held that the assessment order would be required to be held to be invalid, as the same was issued without a DIN. From the decision it appears that the CBDT who had issued the circular in question which had fell for consideration and called for interpretation, was not a party to the proceedings. There was no occasion for the Court to consider the stand of the CBDT and it is only Assistant Commissioner of Income Taxation who was the only respondent. Prima-facie one of us (G.S. Kulkarni, J.) is of the opinion that the placement of the word “order” in paragraph 1 finds place after the word “notice” and before the word “summons” and whether would include “the assessment order”, is one of the questions which would arise for consideration and in the context of the view taken in the case of Ashok Commercial Enterprises [supra] Also another reason being that there is a specific exception made in paragraph 3 of the circular for a deviation/exception from the provision of the DIN as contemplated in paragraph 1 of the circular, and in these circumstances, as to whether paragraph 4 excludes the contents of paragraph 3 and would straightway relate to paragraph 1 being the contention of the assessee would be an issue. To examine such contention in the context of the applicability of the said decision of the Division Bench, in our opinion, CBDT is required to be added as necessary party to the present proceedings, so that all contentions on such issue can be addressed before the Court and gone into and not necessarily confined to our aforesaid prima-facie observations. We grant leave to the petitioner to amend the petition to implead the CBDT as a party respondent and notice be issued to the CBDT. Amendment be carried out by 6 September, 2024. Re-verification is dispensed with. Notice to the added respondent is made returnable on 24 September, 2024. Permission to the petitioner to serve the CBDT by private service by all permissible modes and place on record affidavit of service. Reply affidavit, if any, be filed by the CBDT on the aforesaid issues before the returnable date. Stand over to 24 September, 2024. Till the adjourned date of hearing, it is in the interest of justice that the petitioner be protected. Hence, the impugned assessment order and the proceedings thereunder of demand and penalty shall remain stayed. 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.