AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 706
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.... expenses Rs. 4,32,773/- and initiation of penalty proceedings under S. 270A(2) of the Act. 3. Before the Tribunal, the assessee has moved an application for admission of additional ground under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963 vide letter dated 26.06.2023, which reads as under: "That the order passed under section 250(6) by the Ld. Commissioner of Income-tax (Appeals) - 23, New Delhi is against law and facts on the file since the order passed by the Ld. Assessing Office is non-est and bad in law in as much as:- * the proceedings have not been conducted in the manner prescribed by the Departmental instructions, in particular those relating to e-proceedings issued from time to time, which were to be mandatorily complied with by the Ld. AO. * * Requisite condition of Circular No.19 of 2019 for communicating/recording mandatory computer generated Document Identification Number on the order/notice of demand under section 156 have not been fulfilled." 4. The assessee also moved another application dated 09.02.2022 for admission of yet another additional ground under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963 and sought leave of the Tri....
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....lso not demonstrated as to whether the draft assessment order sent by AO for approval under s. 153D bears any DIN either. In the absence of DIN mentioned in the approval memo, such statutory approval under s. 153D thus is rendered a nonest approval in law. It goes without saying that assessment framed on the basis of such nonest approval is a nullity in the eyes of law. 8. The learned Counsel referred to phraseology used in the CBDT Circular and referred to catena of judicial pronouncements to submit that such statutory approval under section 153D without bearing the DIN is non-est in the eyes of law in view of strict interpretation of CBDT Circular provided by large numbers of judgments delivered by various High Courts and Co-ordinate Bench of Tribunal. 9. The judgments referred include: * CIT vs. Brandix Mauritius Holdings Ltd. 149 taxmann.com 238 (del.)/456 ITR 34 (Delhi) : It is the specific requirement under Circular 2019 to quote DIN in the body of communication. Existence of Exceptional circumstances provided in para 3 of the Circular not demonstrated by revenue. Communication of order issued without conformity of Circular invalid. Failure to ....
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....hstanding the availability alternative remedy. Accordingly, the Court has not adjudicated the matter of the applicability of the Circular and has only opined that this issue does not merit writ jurisdiction. * M/s. Tata Medical Center Trust vs. CIT (Exemption), ITA No.238/Kol/2021 Kolkata, ITAT : The order passed u/s 263 not in conformity with CBDT Circular and consequently invalid and deemed to never have been issued. * Pratap Singh Yadav vs. DCIT, ITA No.1898/Del/2022, Delhi ITAT : Since the DIN is not mentioned in the body of the order and generated subsequently, it is in violation of the Board Circular. * Dilip Kothari vs. PCIT, ITA No.403 to 405/Bang/2022, Bangalore ITAT : Order u/s 263 is without DIN and therefore in violation of the Board Circular and therefore the order is quashed. * Intrado EC India Pvt. Ltd. Vs DCIT, ITA No.239/Bang/2021, Bangalore ITAT : We are unable to appreciate this decision of the DRP, since there is no provision in the Act to issue two order u/s 92CA and the order issued subsequent cannot be taken to substitute the earlier order. If the order dated 01.11.20....
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....ntioning of DIN and submitted that mere non quoting of DIN on internal communications between the Assessing Officer and Addl. Commissioner seeking approval under section 153D is not fatal in itself to render the whole assessment process as invalid proceeding. The learned DR submitted that such approval and internal communications are part and parcel of integrated assessment process and cannot be seen in isolation. The learned DR submitted that the assessment order dated 19.12.2021 in question itself bear on DIN in compliance of Circular dated 14.08.2019 of CBDT. As pointed out, the DIN is quoted a letter dated 20.12.2021 addressed to the assessee and reads as under: "This is to inform you that an order under section 153A of the Income-tax Act, 1961 dated 19.02.2021 is having Document No. (DIN) ITBA/AST/M/153A/2020- 21/1030819568(1)." 12. The learned DR adverted to written submissions made in this regard, which is reproduced hereunder: "Submission in response to the additional legal grounds raised by the Ld. Counsel for the assessee challenging the Assessment Order/Notice of demand u/s 156 on the alleged ground of DIN not being quoted- The AO, DCIT, Central Circle-4, Delhi ha....
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....tted that the entire assessment process in Search cases, which includes the approval of the Range Head, is one integrated process and not a separate compartment/component. The Order of the Assessing Officer (below the rank of JCIT) is rendered valid only with the approval of the Addl./JCIT concerned as per Section 153D of the Income-tax, Act. The DIN is generated for the Assessment Order. * Also, such letter being referred to by the Ld. Counsel of the appellant is in the nature of internal correspondence of the Department, from Range Head to the Assessing Officer which requires no DIN. In fact, the Range Head has himself /herself directed the AO in the letter that 'no Order shall be passed without DIN..." Clearly, there was no requirement of DIN in the approval letter. * The Ld. Counsel for the appellant has also referred to the judgment of the Hon'ble Delhi High Court in the case of the CIT (International Taxation)-1, New Delhi V. Brandix Mauritius Holding Ltd., wherein the Hon'ble Court has upheld the decision of the Hon'ble Tribunal ('D' Bench) in treating Assessment Order as null and void for lack of DIN. * It is humbly submitted herein that the in....
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....tion of legal objection on invalidity of assessment order attributable to alleged infringement of CBDT circular since such objections are overwhelming and goes to the root of the matter. 15. The CBDT Circular no. 19/2019 casts obligations that every income tax authority shall allot a new computer generated Document Identification Number (DIN)in respect of every communication by way of notice, order, letter or any correspondence issued by him to any other income tax authority or assessee or any other person and such number should be quoted thereon. Para 2 of the Circular reads as ; " In order to prevent such instances and to maintain proper audit trail of all communication, the Board in exercise of powers under 119 of the Income Tax Act, 1961(hereinafter referred to as " the Act") has decided that no communication shall be issued by any income tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 2019 unless a computer generated Document Identification Number (DIN) has ....
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....n issued - On appeal to High Court, revenue submitted that intimation letter should be treated as part and parcel of substantive order, however, in the intimation letter there was nothing mentioned as to why in substantive order DIN was not mentioned as mandated in Circular - In Miscellaneous Application proceedings, revenue could not answer a specific query as to how a DIN intimation letter along with manual order fulfils categorical requirement mandated by CBDT Circular and therefore, Tribunal came to conclusion that order passed under section 263 did not satisfy requirement mandated by CBDT Circular -In such backdrop, the Hon'ble High Court held that the appeal of revenue is devoid of substantial question of law and thus liable to be dismissed. 19. The judgments, navigated above, emphasizes on the significance of strict adherence to provisions outlined the CBDT Circular. These rulings requires the income tax authorities to meticulously comply with the mandate of CBDT Circular in letter and spirit and sheds light on the significance of maintaining procedural integrity and upholding the principles of transparency and accountability in the realm of income tax assessments. The stri....