TaxTMI 
TaxTMI 
2025 (12) TMI 746
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....ated 14.08.2019. 2. In order to adjudicate on the issues that arise in the present petition, it is necessary to set out, in brief, the relevant facts:- a) The Petitioner filed its original Return of Income on 28.10.2005, declaring a total income of Rs. 253.76 Crores and filed a revised Return of Income on 30.03.2007 declaring a total income of Rs. 246.59 Crores. Since there were international transactions involved, Respondent No. 1 (AO) made a reference to Respondent No. 2 [the Transfer Pricing Officer (TPO)] under Section 92CA(1) of the IT Act for computing the Arm's Length Price in relation to those international transactions entered into by the Petitioner. The TPO passed an order dated 20.02.2008 under Section 92CA(3) of the IT Act, recommending an addition of Rs. 47.53 Crores to the Arm's Length Price in the transactions entered into by the Petitioner in 4 out of its 9 divisions, the details of which are as under:- • AD & PTD - Manufacturing division : Rs. 6.95 Crores • Medical division - Manufacturing : Rs. 5.66 Crores • Medical division - Distribution : Rs. 32.21 Crores • Video division : Rs. 2.71 Crores ....
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....Crores). j) Consequently, Respondent No. 1 passed an order dated 16.03.2020 giving effect and deleted the transfer pricing adjustment of Rs. 34.92 Crores along with other reliefs granted by the CIT(A) of Rs. 24.01 Crores, and determined the revised total income of the Petitioner at Rs. 278.60 Crores. k) Subsequently, when the appeal before the Tribunal initially came up for hearing, and the fact that the grounds relating to the transfer pricing addition had become infructuous in view of the order passed by the TPO was pointed out, the Members requested the Petitioner to file revised grounds of Appeal in Form No. 36 after excluding the grounds relating to the transfer pricing adjustment. Accordingly, the Petitioner filed a revised Form No. 36 on 20.06.2022 as directed by the Tribunal by excluding the transfer pricing grounds. l) After all this, suddenly the TPO issued a notice dated 21.03.2024 whereby he proposed to rectify his order dated 05.03.2020 and withdraw the relief of Rs. 32.21 Crores granted in respect of the transactions in the Medical Division - Distribution. The Petitioner addressed a letter dated 26.03.2024 pointing out that there was no mist....
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....54 read with Section 250 of the Act dated 29.03.2024 has DIN 'ITBA/REC/M/154/2024-25/1066567478(1).' 3. The Petitioner has raised multiple grounds in the present Writ Petition challenging the impugned order and the impugned letter issued by Respondent No. 1. The primary challenge is that:- (i) the impugned order is illegal inasmuch as it does not, on the face of it, have a DIN and is, thus, contrary to the mandate of the CBDT Circular 19/2019; and (ii) is not passed on the day it is purported to be dated, i.e., 29.03.2024 as the same officer who allegedly passed the order on 29.03.2024 issued a notice dated 20.06.2024 asking the Petitioner to Show Cause on or before 1.07.2024 as to why the rectification proceedings under Section 154 of the Act should not be initiated to rectify the order passed by him on 16.03.2020. 4. In this factual backdrop and adverting to the grounds of challenge set out above, the learned Senior Counsel for the Petitioner invited our attention to the mandate of Circular 19/2019 dated 14.08.2019 which sets out the requirement of all communications from the department to bear a DIN. The CBDT has elaborately set out the manner in which a ....
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....he Calcutta High Court in PCIT v. Tata Medical Centre Trust (2023) 459 ITR 155 (Cal) wherein also a similar view of the mandatory nature of an order to have a valid DIN was taken. The Counsel submitted that the mere fact that aforesaid judgments of the Delhi High Court, Calcutta High Court and the Madras High Court in Sutherland Global Services Inc (supra) were stayed by the Supreme Court, did not mean that the judgments had lost their precedential value. 5. Without prejudice to the aforesaid arguments, the Counsel for the Petitioner next pointed out that Respondent No. 1 proposed to rectify his earlier order dated 16.03.2020, which could only be rectified till 31.03.2024, because Section 154(7) of the IT Act mandated that no rectification is permissible after the expiry of four years from the end of the Financial Year in which the order sought to be amended/rectified was passed. It was further pointed out that the impugned order is back dated and could not have been passed on 29.03.2024 especially because the same individual who is purported to have passed the order dated 29.03.2024 issued a Show Cause Notice dated 20.06.2024 as to why a rectification order should not be passed....
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....d on 29.05.2025 and the other affirmed on 20.11.2025 and specifically relied on the second Affidavit for pointing out that the Notice dated 20.06.2024 under Section 154 of the IT Act was inadvertently issued by the subordinates, assuming that no order was passed as the manual order was not uploaded in the system and that the aforesaid notice is merely an oversight and should be considered as a bona fide mistake as per Section 292B of the IT Act. She also contended that once the TPO has issued a notice to the Petitioner for rectification proceedings there is no need for Respondent No. 1 to again issue a notice before passing the rectification order. In support of this, she placed reliance on Section 92CA of the IT Act. 7. In rejoinder, the learned Senior Counsel for the Petitioner first of all objected to the fact of an alternate remedy being available and pointed out that the Appeal filed before the Tribunal is inter alia against the order passed by the CIT(A) on 29.03.2019. In the present Petition, the Petitioner has challenged the impugned order dated 29.03.2024 passed by Respondent No. 1 (to rectify the order passed by him on 16.03.2020) as it does not have a DIN and is back ....
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....the Petitioner as it was sent to a wrong Email ID namely "[email protected]" and the delivery status in the screenshot at Page No. 538 also shows it as 'bounced' even though Respondent No. 1 was aware of the correct Email ID of the Petitioner as the Notice dated 10.07.2024 for the next year i.e. A.Y. 2006-07 (at Page Nos. 563 to 565 of the Affidavit-in-Rejoinder) was sent to the correct Email ID by the same Officer i.e. Mr. Virender Singh. 10. Further, the learned Senior Counsel for the Petitioner pointed out that the delay in the DIN generation invalidates the order, and what is stated by the Respondents in the Affidavit-in-Reply at paragraph 10(e), is contrary to the Circular as it nowhere provides that the DIN is required only when the order is to be communicated to the Assessee and such an interpretation would frustrate the whole object of the Circular itself which was issued to maintain a proper audit trail. Hence, he pointed out that before passing an order a DIN has to be generated and quoted on the face of the order. Further, while dealing with the judgment of the Jharkhand High Court in Prakash Lal Khandelwal (supra), he pointed out that the same is distinguishable on fact....
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....ion 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-administration. Presently, almost all notices and orders are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as "communication") were found to have been issued manually, without maintaining a proper audit trail of such communication. 2. In order to prevent such instances and to maintain proper audit trail of all communication, the Board in exercise of power under Section 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, ord....
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.... 3-(i), (ii) or (iii) above shall have to be regularised within 15 working days of its 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. An intimation of issuance of manual communication for the reasons mentioned in para 3(v) shall be sent to the Principal Director General of Income-tax (Systems) within seven days from the date of its issuance. 7. Further, in all pending assessment proceedings, where notices were issued manually, prior to issuance of this Circular, the income-tax authorities shall identify such cases and shall upload the notices in these cases on the systems by 31st October, 2019. 8. Hindi version to follow." (emphasis supplied) 14. Based on the above, we find that the object with which the Circular was issued by the CBDT was to ensure that a proper audit trail is maintained in respect of each and every notice / order / summons / letter / correspondence issued after 1.10.2019. The Supreme Cou....
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....case was covered by one of the exceptional circumstances, there has been an abject failure to regularise the defect within the prescribed time frame of 15 working days by Respondent No. 1. Respondent No. 1 has issued the impugned letter dated 10.07.2024 providing a DIN for the impugned order, but the impugned letter is not communicated to the Petitioner, and in any event is beyond the time period of 15 working days provided in the Circular to regularize the impugned order. The fact that the impugned order is manually passed without a DIN on the face of the order and without referring to any exceptional circumstances on the face of the order, the impugned letter separately furnishing the DIN for passing the impugned order, cannot validate the impugned order passed without a DIN, when no reasons are mentioned in the impugned order. 16. We find that the reliance placed by the Respondents on the judgment of the Jharkhand High Court in Prakash Lal Khandelwal (supra) is wholly misplaced. The said facts, on the basis of which that judgment was rendered, are distinguishable from the facts of this case, where there was a single days delay in uploading the order and generating the DIN. Ev....
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....e satisfaction note will fall within the scope of paragraph 2 of the circular as a communication of the specified type issued to any person. In the case of the satisfaction note no regularisation dated 13th October 2021 has been issued; (e) In view of the binding nature of circular issued under section 119 of the Act, and the peculiar facts and circumstances of the case, the consequences of contravention of the circular set out above, therefore, ought to be given full effect to. The object of the said Circular is clear and laudatory and intended to ensure that proper trail of all assessment and other orders are maintained and further that any deviation therefrom can only be undertaken after prior written approval of the higher authorities under the Act. Therefore, the satisfaction note dated 13th July 2021 and the impugned order of assessment dated 28th September 2021 ought to be treated as invalid and deemed never to have been issued;" 18. Further, the Judgment of this Court in Hexaware Technologies Ltd v. ACIT (supra) dealt with a case where the Assessing Officer issued a reopening notice under Section 148 of the IT Act without a DIN and the same was treated as invali....
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.... is invalid and bad in law as the same has been issued without a document identification number." 19. Even the Delhi High Court in CIT v. Brandix Mauritius Holdings Ltd (supra) held that the final Assessment Order passed manually without a DIN could not be corrected taking recourse to Section 292B of the IT Act and such an order is unsustainable. The relevant extract of paragraphs 16 to 20 of the judgment is as under:- "16. The final assessment order was passed by the Assessing Officer (AO) on 15th October 2019, under Section 147/144(C)(13)/143(3) of the Act. Concededly, the final assessment order does not bear a document identification number. There is nothing on record to show that the appellant-Revenue took steps to demonstrate before the Tribunal that there were exceptional circumstances, as referred to in paragraph 3 of the 2019 circular, which would sustain the communication of the final assessment order manually, albeit, without document identification number. 16.1 Given this situation, clearly paragraph 4 of the 2019 Circular would apply. 17. Paragraph 4 of the 2019 Circular, as extracted hereinabove, decidedly provides that any communication w....
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....never been issued. The Tribunal on examination of the facts held that the requirement as mentioned in the circular, namely, quoting of the document identification number, has not been followed and therefore allowed the assessee's appeal. 5. The learned counsel for the appellant submitted that the intimation letter should be treated as part and parcel of the substantive order. However, in the intimation letter there is nothing mentioned as to why in the substantive order the document identification number was not mentioned as mandated in the circular. 6. The Revenue filed miscellaneous application seeking for rectification of the said order. Once again the Tribunal has undertaken a factual exercise and in fact, raised a specific query to the Revenue to point out how a document identification number intimation letter along with the manual order as explained by the Commissioner of Income-tax (Exemption) in his reply fulfils the categorical requirement mandated by the Central Board of Direct Taxes circular, more particularly, in paragraph 2 of the said circular, that the body of the communication, the order under section 263 of the Act, must contain the fact and t....
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....wn is that the impugned order is back dated. It is apparent that the time limit provided for in Section 154(7), viz., a period of 4 years from the end of the relevant Financial Year expired on 31.03.2024, as the order sought to be amended was dated 16.03.2020. The impugned order was not passed till 20.06.2024 as the same Assessing Officer, viz., Mr. Virender Singh who has passed the impugned order allegedly on 29.03.2024, has issued a Show Cause Notice seeking to commence rectification proceedings under Section 154 of the IT Act. We also agree with the submission of the Counsel for the Petitioner that a separate Notice under Section 154(3) of the IT Act would have to be issued by Respondent No. 1 granting an opportunity of being heard to the Petitioner even though the rectification order that was proposed to be passed was to give effect to an order passed by the TPO. As the effect of the order would have been to increase the total income, the mandate of Section 154(3) would have to be complied with by Respondent No. 1. The fact that the Notice was issued on 20.06.2024 itself shows that the impugned order could not have been passed before this date and by the time this Notice dated ....