AI Drafter 
TaxTMI 
TaxTMI 
2023 (8) TMI 1403
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.... in upholding, the action of the Assessing Officer." 2. Ld. AR of the assesse has submitted that the assesse is an individual and senior citizen of 81 years. The assesse is a farmer and sold his agricultural land for total consideration of Rs. 1.25 crore. The AO passed assessment order u/s 147 r.w.section 144 on 24.12.2018 determining the income at Rs. 1.25 crore and demand of Rs. 51,34,800/- was raised. The ld. AR has pointed out that the assesse was never served with the assessment order dated 24.12.2018 passed by the AO and assessee came to know about the said order only when the AO has passed rectification order u/s 154 on 10.10.2019. He has further contended that the assesse requested the AO to supply the assessment order passed on 24.11.2018 but till date the assesse have not been given the assesemnt order passed by the AO. Further he has submitted that the impugned rectification order passed u/s 154 of the Act is invalid for want of Documents Identification No. (DIN). He has referred to the order passed u/s 154 and submitted that there is no DIN mentioned on the rectification order and the AO subsequently generated the DIN on 14.10.2019 which is placed at page no.9 of the....
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....authorities relating to assessment, penalty, statutory or otherwise etc. unless the computer generated documents identification no. (DIN) has been allotted and is duly quoted in the body of such communication. Any communication which is not inconformity with DIN shall be treated as invalid and shall be deemed to have never been issued. It is pertinent to note that this issue has been considered by this Tribunal in a series of decisions by the Hon'ble High Court of Delhi as well as Hon'ble Supreme Court as relied upon by the assesse. Delhi Benches of the Tribunal in case of Brandix Mauritius Holdings Ltd., vs DCIT (ITA No. 1542/Del/2020 dated 19.09.2022 has considered this issue in para 7 to 11 as under: "7. We have heard the rival submissions and perused the material on record. Before proceeding further we will look at the contents of the CBDT circular No.19/2019 dated 14.08.2019 which is reproduced below: CIRCULAR NO. 19/ 2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th August, 2019. Subject: Generation/Allotment/Quoting of Document Iden....
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....after recording reasons in writing in the file and with prior written approval of the Chief Commissioner/Director General of income-tax. In cases where manual communication is required to be issued due to delay in PAN migration, the proposal seeking approval for issuance of manual communication shall include the reason for delay in PAN migration. The communication issued under aforesaid circumstances shall state the fact that the communication is issued manually without a DIN and the date of obtaining of the written approval of the Chief Commissioner/ Director General of Income-tax for issue of manual communication in the following format- " .. This communication issues manually without a DIN on account of reason/reasons given in para 3(i) / 3(ii) /3(iii) / 3(iv) / 3(v) of the CBDT Circular No ...dated (strike off those which are not applicable) and with the approval of the Chief Commissioner/Director General of Income Tax vide number .... dated .... 4. Any communication which is not in conformity with Para-2 and Para-3 above, shall be treated as invalid and shall be deemed to have never been issued. 5. The communication issued manually in the three situations spe....
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....al of Income-tax was required to be obtained in the prescribed format in terms of the CBDT circular. We also note that in terms of para 4 of the CBDT circular, such a lapse renders this impugned order as invalid and deemed to have never been issued. 13.1 It is also important to note about the binding nature of CBDT circular on the Income-tax Authorities for which gainful guidance is taken from the decision of Hon'ble Supreme Court in the case of CIT v. Hero Cycles (P.) Ltd. [1997] 94 Taxman 271/228 ITR 463 wherein it was held that circulars bind the ITO but will not bind the appellate authority or the Tribunal or the Court or even the assessee. 13.2 In the case of UCO Bank v. CIT [1999] 104 Taxman 547/237 ITR 889 (SC), Hon'ble Supreme Court while dealing with the legal status of such circulars, observed thus (page 896): "Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act, whi....
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....Chhattisgarh High Court in the case of Sunita Finlease Ltd. (supra), which are as under: 7. We have considered the rival submissions advanced by the learned Advocates. Even assuming that the intention of CBDT was to restrict the time for selection of the cases for scrutiny within a period of three months, it cannot be said that the selection in this case was made within the aforesaid period. Admittedly, the return was filed on 29th October, 2004 and the case was selected for scrutiny on 6th July, 2005. It may be pointed out that Mrs. Gutgutia was, in fact, reiterating the views taken by the learned Tribunal which we also quoted above. By any process of reasoning, it was not open for the learned Tribunal to come to a finding that the department acted within the four corners of Circulars No. 9 and 10 issued by CBDT. The circulars were evidently violated. The circulars are binding upon the department under section 119 of the I.T. Act. 8. Mrs. Gutgutia, learned Advocate submitted that the circulars are not meant for the purpose of permitting the unscrupulous assessees from evading tax. Even assuming, that to be so, it cannot be said that the department, which is State....
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....N after obtaining the necessary approvals. Therefore we are of considered view that the order dated 31.10.2019 is not in conformity with Para 2 and Para 3 of the CBDT circular. In view of these discussions and respectfully following the decision of the Kolkata and Delhi Benches of the Tribunal, we hold that the orders passed u/s.92CA dated 31.10.2019 is invalid and shall be deemed to have never been issued as per Para 4 of the CBDT circular as the order is not conformity with Para 2 and Para 3. Accordingly the TP adjustment made through an invalid order is also rendered invalid and deleted . 7. Thus, the Delhi Tribunal while deciding this issue has considered the CBDT Circular no.19 of 2019 along with exceptions provided in para 3 of the said circular. The said decision of the Tribunal has been upheld by the Hon'ble Delhi High Court reported in 293 taxmann 385 in para 4 to 21.11 as under: "4. The 2019 Circular also sets out certain circumstances in which exceptions can be made. These circumstances are categorically referred to in paragraph 3 of the 2019 Circular. For the sake of convenience, paragraph 3, in its entirety, is extracted hereafter: "3. In exception....
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.... issuance, by - i. uploading the manual communication on the System. ii. compulsorily generating the DIN on the System; iii. communicating the DIN so generated to the assessee/any other person as per electronically generated pro-forma available on the System." 6. Furthermore, the 2019 circular, in paragraph 6, states that the intimation of issuance of manual communication, for the reasons mentioned in paragraph 3(v), shall be sent to the Principal Director General of IncomeTax (Systems) within seven (7) days from the date of its issuance. 7. As a matter of fact, paragraph 7 of 2019 Circular mandates alignment of all pending assessment proceedings, where notices were issued manually, prior to the issuance of the said circular, by having them uploaded in the system by the date given therein, i.e., 31.10.2019. 8. Therefore, any communication which is not in conformity with the provisions of paragraph 2 and 3 of the 2019 Circular is to be treated as invalid, as if it was never issued [See paragraph 4 of the 2019 Circular1 ]. 8.1 In a nutshell, communications referred to in the 2019 Circular would fall in the following slots....
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....ubstantive orders passed qua the assessee. 10.1 It is Mr Rai's contention that the failure to generate and allocate DIN in this case is a mistake or at best, a defect and/or an omission, which ought not to invalidate the assessment proceedings. 10.2 In support of this plea, Mr Rai has referred to the judgment of the coordinate bench in CIT v. Jagat Novel Executives Pvt. Ltd., [2013] 356 ITR 562. 11. Mr Ajay Vohra, learned senior counsel who appears on behalf of the respondent/assessee, contends to the contrary. It is his contention that the 2019 Circular is binding on the revenue. 11.1 Mr Vohra also submits that the error is jurisdictional in nature and therefore, cannot be corrected by taking recourse to Section 292B of the Act. 11.2 In support of his plea that the 2019 Circular is binding on the revenue, Mr Vohra has relied on the following judgments: i. UCO Bank v. CIT, [1999] 237 ITR 889 (SC); ii. Ellerman Lines Ltd. v. CIT, [1971] 182 ITR 913 (SC); and iii. DCIT v. Sunita Finlease Ltd., [2011] 330 ITR 491 11.3 Furthermore, to back his contention that recourse cannot be taken to the provisions of S....
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....nt rendered in K.P. Varghese v. Income Tax Officer, Ernakulam and Anr., (1981) 4 SCC 173. The relevant extracts are set forth hereafter: "12. But the construction which is commending itself to us does not rest merely on the principle of contemporanea expositio. The two circulars of the Central Board of Direct Taxes to which we have just referred are legally binding on the Revenue and this binding character attaches to the two circulars even if they be found not in accordance with the correct interpretation of sub-section (2) and they depart or deviate from such construction. It is now well settled as a result of two decisions of this Court, one in Navnitlal C. Javeri v. K.K. Sen [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] and the other in Ellerman Lines Ltd. v. CIT [(1979) 4 SCC 565] that circulars issued by the Central Board of Direct Taxes under Section 119 of the Act are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act. The question which arose in Navnitlal C. Javeri case [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] was in regard to the constitutional validity of Sections 2(6-A)(e) ....
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....ed under Section 5(8) of the Act, this Court observed in Navnitlal C. Javeri v. K.K. Sen, Appellate Assistant Commissioner, Bombay [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] : "It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under Section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision.‟ The directions given in that circular clearly deviated from the provisions of the Act, yet this Court held that the circular was binding on the Income Tax Officer." The two circulars of the Central Board of Direct Taxes referred to above must therefore be held to be binding on the Revenue in the administration or implementation of sub-section (2) and this sub-section must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer." ....
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....le Supreme Court in case of Pradeep Goyal vs. UOI and others (supra) and held in para 4 to 7 as under: "4. We have heard Ms. Charu Mathur, learned counsel appearing on behalf of the petitioner and Shri Balbir Singh, learned ASG appearing on behalf of Union of India. 5. By way of this writ petition under Article 32 of the Constitution of India, the petitioner has prayed for the following reliefs:- "a. Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents to take all necessary steps to implement a system for electronic (digital) generation of a Document Identification Number(DIN) for all communications sent by the state tax officers to taxpayers and other concerned persons; b. Issue a writ of mandamus or any other appropriate writ, order or direction to the GST Council to consider and take a policy decision in respect of implementation of DIN system by all the states; c. Issue a writ of mandamus or any other appropriate writ, order or direction to the Central Government/CBIC to introduce centralised DIN for the entire country; d. pass such further order(s) as may be deemed fit and proper in ....
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....ed the procedure as provided in the circular no.19 of 2019 in para 2 then even if the present case falls in the exceptions under para 3(v) being no PAN case the order passed by the AO u/s 154 is invalid. The subsequent generation of DIN by the AO on 14th October 2019 would not change the illegality of the order when the procedure provided under para 2 of the circular is not followed by the AO. Hence following the earlier decision of this tribunal as well as the decision of the Hon'ble Delhi High Court in case of CIT vs. Brandix Mauritius Holdings Ltd.,(supra) the impugned order passed by the AO u/s 154 of the Act is invalid and the same is quashed. The assesse has stated that the order passed by the AO u/s 147 r.w. section 144 dated 24.12.2018 has not been received by the assesse and therefore, he could not avail the remedy under the law. We direct the AO to supply the assessment order dated 24.12.2018 to the assesse within the period of one months from the date of receipt of this order. 10. In the result, the appeal filed by the assesse is allowed. Order pronounced in the open court on 24.08.2023. ============= Document 1 120/1088034(1) INCOME TAX DEPARTMENT COCK 10/....