AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (7) TMI 565
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....grounds of appeal in all the six quantum appeals (except the amount of impugned addition which varies in each of the AYs). We reproduce below the grounds raised by the assessee in AY 2007-08 in ITA No. 2951/Del/2022 for reference purposes: "1. That having regard to the facts and circumstances of the ease. Ld CITCA) has erred in law and on facts in not reversing the action of Lal. AO in not following the direction of Hon'ble Tribunal vide order dated 19-12-2018 & thus Ld. CIT(A) ought to have quashed the impugned order passed by the assessing officer on this ground. 2. That having regard to the facts and circumstances of the case. Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 254/153C/144 without assuming jurisdiction us per law and without recording requisite satisfaction as per law and without complying with the other mandatory conditions as envisaged under the Act. 3. That in any case and in any view of the matter, action of Id CITIA) confirming the action of Ld. AO in framing the impugned assessment order u 254/153C/143(3), is bad in law and against the facts and circumstances of the case, more ....
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....me may please be admitted..." 3.1 In support of the admittance of the above additional grounds, the assessee placed reliance on the following decisions: i) CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC). ii) National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC). iii) VMT Spinning Co. Ltd. vs. CIT & Annr. (2016) 389 ITR 326 (P&H). iv) CIT vs. Sam Global Securities (2014) 360 ITR 682 (Delhi). v) Siksha vs. CIT, (2011) 336 ITR 0112 (Orissa). vi) Inventors Industrial Corporation Ltd. vs. CIT (1992) 194 ITR 548 (Bom.). 4. We have heard the Ld. Representative of the parties. The additional ground raised by the assessee is purely legal and jurisdictional issue going to the root of the matter. In National Thermal Power Co. Ltd. (supra), the Hon'ble Supreme Court observed that the Tribunal should not be prevented from considering questions of law arising in assessment proceedings. Where the Tribunal is only required to consider the question of law arising from the facts which are on record in the assessment proceedings there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order....
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....ough the CBDT Circular No. 19/2019 dated 14.08.2019, which reads as under:- 10. In para 2 thereof it is stated that in order to prevent instances (narrated in the opening para) and to maintain audit trail of all communication, no communication shall be issued by any Income Tax Authority to the assessee or any other person on or after the 1st day of October, 2019 unless a computer generated DIN has been allotted and is duly quoted in the body of such communication. In the present case at hand, undoubtedly, the impugned assessment order(s) are one such communication which has been issued by the Ld. AO without allotting a computer generated DIN and duly quoting in the body of the impugned assessment order(s). The assessment order(s) were only accompanied by a covering letter dated 31.12.2019 which contained the DIN and letter no. for the said letter. There is thus clear violation of the specific requirement under the CBDT Circular No. 19/2019 to quote the DIN in the body of the impugned assessment order(s). 11. Para 3(i),(ii),(iii),(iv) and (v) of the Circular No. 19/2019 enumerate the exceptional circumstances in which the Income Tax Authority may issue the communication manually b....
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.... the regime set forth in the 2019 Circular. 8.2 Therefore, whenever communications are issued in the circumstances alluded to in paragraph 3(i) to (v), i.e., are issued manually without a DIN, they require to be backed by the approval of the Chief Commissioner/Director General. The manual communication is required to furnish the reference number and the date when the approval was granted by the concerned 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 provisi....
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.... 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) 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 se....
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....rections 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 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....
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....2949, 2950/Del/2022 18. The common grounds of appeal raised by the assessee in all the six penalty appeals (except the amount of impugned penalty which varies in each of the AYs) are as unders: "1. That having regard to the facts and circumstances of the case, Ld. CITIA) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty of Rs. 72,685/- u/s 271(1)(c) and framing the impugned penalty order and that too without assuming jurisdiction as per and without complying with the mandatory conditions laid down under the said section. 2. That having regard to the facts and circumstances of the case Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty of Rs. 72,685/- and passing the impugned penalty order being illegal and void ab-initio and without obtaining the valid approval from the competent authority in accordance with law. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in imposing penalty of Rs. 72.685/-u/s 271(1)(c), is bad in law and against the facts and circumstances of the case and without granting adequate opportunity of hearing and without ....