AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 36
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.... ii. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in comparing only the ratio of cash deposited in the bank to cash sales made by the assessee for both the F.Y. 2015-16 and F.Y. 2016-17 and ignoring the fact that there were abrupt change in cash sales & cash deposited in F.Y. 2016-17 with respect F.Y. 2015-16. iii. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in ignoring the fact that during the last year average cash in hand was about Rs. 25 Lakhs, which increased disproportionately to 3.20 Crores as on 08.11.2019. iv. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is correct in ignoring the fact that assessee has shown abnormal increase in amount of cash sales during the month of October, 2016 and manipulated the cash sales figures as VAT Returns for the month of October, 2016 were not filed until the date, when demonetization was announced. v. (a) Whether on law and facts of the case the order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any/all the grounds ....
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.... upon a number of judicial precedents wherein the courts/authorities have decided the impugned issue in favour of the assessee. He brought to our notice the order of the Co-ordinate bench of the Tribunal in the case of sister concern of the assessee in Rama Pashu Aahar (P) Ltd. Vs. ACIT (ITA No. 1456/Del/2021) for AY 2017-18 dated 30.05.2023 wherein the impugned issue on similar fact pattern has been decided in favour of the assessee. He, therefore, vehemently argued that in the light of the facts and circumstances of the assessee's case, the order passed by the Ld. AO be held as invalid and 'non-est'. 6. The Ld. DR, on the other hand, submitted that the assessment order was supported by a covering letter bearing DIN for the assessment order which is within the time-limit of 15 days as prescribed under the CBDT Circular. Therefore, the assessment order was passed in compliance with the CBDT Circular 19/2019 dated 14.08.2019. He relied on the order of the Ld. CIT(A) and referred to the findings of the Ld. CIT(A) in para 6.1 of the appellate order which reads as under: "Ground no. 1.2 & 1.3 is raised on the issue that impugned assessment order, in the absence of any Docum....
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....namely 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 as per electronically generated proforma available on the system. 10. Para 4 of the Circular says in unequivocal terms that any communication which is not in conformity with para 2 and para 3 shall be treated as invalid and shall be deemed to have never been issued. 11. The case of the assessee is that the communication, namely, the assessment order dated 31.12.2019 for AY 2017-18 is not only without mention of DIN in the body of the order, there is no material on the record mentioning the reason for issuance of order without DIN and the date of approval of Director General / Commissioner of Income Tax for issuance of order without DIN. There is thus violation of the mandate enshrined in para 2 and para 3 of the CBDT Circular No. 19/2019 dated 14.08.2019. Therefore, the consequence mentioned in para 4 of the said Circular, namely that the impugned assessment order dated 31.12.2019 be treated as invalid and non-est in the eye of law should follow. 12. We do not find any substanc....
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....ned officer. The formatted endorsement which is required to be engrossed on such a manual communication, should read as follows: "....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....." 12. We have heard learned counsel for the parties. The present appeal is preferred under Section 260A of the Act. The Court's mandate, thus, is to consider whether or not a substantial question of law arises for consideration. 12.1 As noted above, the impugned order has not been passed on merits. 13. The Tribunal has applied the plain provisions of the 2019 Circular, based on which, it has allowed the appeal preferred by the respondent/assessee. 14. The broad contours of the 2019 Circular have been adverted to by us hereinabove. 14.1 Insofar as the instant case is concerned, admittedly, the draft assessment order was passed on 30.12.2018. 15. The respondent/assessee had filed its objections qu....
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.... 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) and 12(1-B) which were introduced in the Indian Income Tax Act, 1922 by the Finance Act, 1955 with effect from April 1, 1955. These two sections provided that any payment made by a closely held company to its shareholders by way of advance or loan to the extent to which the company possesses accumulated profits shall be treated as dividend taxable under the Act and this would include any loan or advance made in any previous year relevant to any assessment year prior to Assessment Year 1955-56, if such loan or advance remained outstanding on the first day of the previous year relevant to Assessment Year 1955-56. The constitutional validity of these two sections was assailed on the ground that they imposed unreasonable restrictions on the fundamental right of the assessee under Article 19(1)(f) and (g) of the Constitution by taxing outstanding loans or advances of past years as dividend. The Revenue however relied on a circular issued by the Central Board of Revenue unde....
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....venue in the administration or implementation of sub-section (2) and this subsection must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer. " [Emphasis is ours] 17.3 Also see the following observations of a coordinate bench in Back Office IT Solutions Pvt. Ltd. v. Union of India, 2021 SCC OnLine Del 2742, in the context of the impact of circulars issued by the revenue: "24....In this context, tax administrators have to bear in mind the well- established dicta that circulars issued by the statutory authorities are binding on them, although, they cannot dictate the manner in which assessment has to be carried out in a particular case. A Circular cannot be side-stepped causing prejudice to the assessee by bringing to naught the object for which it is issued. [See: K.P. Varghese vs. Income-tax Officer 1, [1981] 7 Taxman 13 (SC); Also see: UCO Bank, Calcutta v. Commissioner of Income Tax, W.B., (1999) 4 SCC 599]. " 18. The argument advanced on behalf the appellant/revenue that recourse can be taken to Section 292B of the Act is untenable having regard to the phraseology used in paragraph 4 of the....
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.... it is set aside. 16. Consequent to the above, the ground of cross objection taken by the assessee raising purely legal issue is allowed. 17. Since, we have quashed the assessment order, the issues arising in Revenue's appeal for the AY involved, which are on merits, have become academic. Hence, there is no need for adjudicating the same. 18. In the result, appeal of the Revenue for the AY 2017-18 is dismissed and CO of the Assessee for the AY 2017-18 is allowed. Order pronounced in the open court on 19^th December, 2023. ============= Document 1 Circular No. 1/2019 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 Identification Number in Notice/Order/Summons/ letter/correspondence issued by the Income-tax Department- reg. With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax- admi....
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....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- Document 2 This communication issues manually without a DIN on account of reason/reasons given in para 3/3(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 specified in para 3-(i), (ii) or (iii) above shall have to be regularised within 15 working days of its issuance, by- 6. II. II. uploading the manual communication on the System. compulsorily generating the DIN on the System; communicating the DIN so generated to the a....