Validity of reassessment on non-issuance of DIN for notices u/s 143(2): reassessment jurisdiction quashed where DIN rules were not complied with

From 01.10.2019 issuance of communications required a computer-generated Document Identification Number; manual issuance was permissible only when technical difficulties prevented DIN generation, provided reasons were recorded in writing and prior written approval of the Chief Commissioner/Director General was obtained. Notices issued under section 143(2) without such recorded reasons and prior approval are invalid and deemed never issued. Consequentially, any assumption of jurisdiction under section 148 for reassessment based on such defective 143(2) notices is vitiated and the reassessment proceedings are void ab initio.

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Issues: Whether notices purportedly issued under section 143(2) of the Income-tax Act, 1961 for assessment years 2012-13 to 2016-17, which were issued manually without a computer-generated Document Identification Number (DIN) and without compliance with CBDT Circular No.19/2019, are valid; and whether, in the absence of valid notices under section 143(2), the assumption of jurisdiction under section 148 and consequential reassessment orders are vitiated.

Analysis: The CBDT Circular No.19/2019 made it mandatory from 01.10.2019 that communications by the income-tax authorities must quote a computer-generated DIN, and permitted manual issuance only in specified exceptional circumstances subject to reasons recorded in writing and prior written approval of the Chief Commissioner/Director General of Income-tax, with further obligations for regularisation. The material on record (ITBA timeline and RTI responses) shows absence of evidence that the notices under section 143(2) were issued with DIN or were validly regularised as manual communications in terms of the Circular. The Department failed to demonstrate recorded reasons and prior written approval for manual issuance or subsequent regularisation within the framework of the Circular. Where compliance with the Circular is mandatory and absent, the communications fall within para 4 of the Circular and are to be treated as invalid and deemed never issued. The invalidity of notices under section 143(2) removes the essential precondition for valid reassessment proceedings under section 148.

Conclusion: Notices under section 143(2) for the years under consideration are invalid for non-compliance with CBDT Circular No.19/2019 and are deemed never to have been issued; accordingly the assumption of jurisdiction under section 148 and the reassessment orders are quashed as void ab initio, and the additional ground is allowed in favour of the assessee.

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