TaxTMI 
TaxTMI 
2023 (12) TMI 1516
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....ta)I and CBDT Circular No.19/2019 dated 14-08-2019. 2. That in any case and in any view of the matter, the assumption of jurisdiction for passing of the impugned assessment order u/s 143(3) dated 08-03-2021, is illegal, bad in law and the same is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, the assumption of jurisdiction for passing of the impugned assessment order u/s 143(3) dated 08-03-2021 is illegal, bad in law, inter alia for the reason that notice u/s 143(2) dated 14-10-2020 was issued by Ld. ACIT, CC-31, Delhi even before order u/s 127 dated 15-10-2020 giving jurisdiction to ACIT, CC-31, Delhi meaning thereby impugned notice u/s 143(2) was issued by the non- jurisdictional officer which is not tenable in law." 3. Since the issues raised in the additional grounds are purely legal and jurisdictional issues and can be decided based on facts and materials available on record without requiring investigation into fresh facts, we are inclined to admit the additional grounds for adjudication. 4. The core issue arising in the additional grounds relates to validity of the assessment orde....
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....id. In support of such contention, learned counsel relied upon the following decisions : (i). BVG India Limited vs. DCIT (IT(SS)A No. 11 to 16/PUN/2023 dated 19.10.2023. (ii). Finesse International Design Pvt. Ltd. vs. DCIT, (ITA No. 1298/Del/2021 dated 13.12.2023. 7. Per contra, learned Departmental Representative submitted, non-mentioning of DIN on the approval issued under section 153D is a mere irregularity and cannot invalidate the assessment order. He further submitted, since the assessee has availed opportunity and participated in the assessment proceedings, no prejudice is caused. 8. We have considered rival submissions and perused materials on record. We have also applied our mind to the judicial precedents cited before us. As far as the factual aspect is concerned, there is no dispute that the assessment proceedings were initiated in case of the assessee based on the search and seizure operation. Therefore, as per the provisions of the Act, in case of search assessments, the Assessing Officer before issuance of the assessment order has to seek approval of the competent authority under section 153D of the Act. Evidently, complying to the said statut....
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....approval of the competent authority. Thus, in our view, the approval granted under section 153D of the Act is not in consonance with the CBDT circular No. 19/2019 dated 14.08.2019. Therefore, the issue which arises for consideration is, what would be the effect of approval under section 153D of the Act without DIN. As we find, while considering identical issue of issuance of approval under section 153D of the Act without generating DIN and mentioning it in the body of the communication/order, the coordinate Bench in the case of BVG India Limited vs. DCIT (supra) has held as under : 22. Heard both the parties and perused the material available on record. The ld. AR, Shri Vijay Mehta led his submissions vide ground No. 1 challenging the approval u/s. 153D of the Act is invalid for non-mentioning of DIN. Further, non-application of mind by the approving authority i.e. Addl. CIT, wherein, it is noted he divided the said challenge in two parts i.e. non-application of mind while granting approval u/s. 153D of the Act terming the same as mechanical in nature and second part is the AO passed final assessment order altering the draft assessment order without having fresh approval. ....
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....o exceptional circumstances claimed nor brought to our notice in not generating the DIN in pursuance of para 3 of the said circular. The ld. DR vehemently contended that there was no requirement of law and guidance of the CBDT for generation of DIN for the approval by the Addl. CIT. We find no force in the arguments of the ld. DR as it is contrary to the guidelines contained in CBDT circular which is binding on all Income Tax Authorities. Further, para 4 of said circular provides that any communication which is not in conformity with para 2 and 3 shall be treated as invalid and shall be deemed to have never been issued, which clearly explains any communication without DIN is invalid in the eye of law. Thus, we find approval u/s. 153D of the Act is covered by para 2 of Circular No. 19/2019. Therefore, in the present case non-mentioning of DIN on approval granted u/s. 153D of the Act by the Addl. CIT renders the assessment order dated 30-09-2021 passed u/s. 153A r.w.s. 144 of the Act invalid treating the same deemed to have never been issued. 26. In order to come to such conclusion, we find support from the decision of Hon'ble High Court of Chhattisgarh in the case of Ju....
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.... of the above finding of the Hon'ble High Court of Chhattisgarh, it is noted that the assessee therein agitated that there was no proper sanction/approval u/s. 151 of the Act on the date of issuance of notice u/s. 148 of the Act. The respondent- revenue therein placed on record copy of screen shot of approval on ITBA web portal with DIN number. The Hon'ble High Court was pleased to observe that the sanction/approval u/s. 151 of the Act prima facie shows the DIN number showing status to be generated on 31-03-2021, held cannot be said that there was no sanction/approval for issuance of notice u/s. 148 of the Act and rejected the contention of the assessee. It is clear from above finding of Hon'ble High Court that the approval u/s. 151 of the Act is covered by para 2 of Circular No. 19/2019 of CBDT. 28. Further, we also find support from the decision of Hon'ble High Court of Chhattisgarh in the case of Bharat Krishi Kendra (supra). The relevant part at para 14 is reproduced here-in-below for ready reference : "14. Third submission of learned counsel for petitioner is that approval granted under Section 151 of the Act of 1961 does not bear digital sign....
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....Circular No. 19/2019. The relevant part is reproduce here- in-below for ready reference : "18 Whether the impugned assessment order dated 28th September 2021 is invalid on account of it being issued without a DIN? (a) The CBDT, in exercise of powers under Section 119(1) of the Act, has issued a Circular No.19/2019 dated 14th August 2019 providing that no communication shall be issued by any Income Tax Authority interalia relating to assessment orders, statutory or otherwise, inquiries, approvals, etc. to an assessee or any other person on or after 1st October 2019 unless a computer generated DIN has been allotted and is quoted in the body of such communication. The Circular reads as under : CIRCULAR NO.19/2019 (F. NO.225/95/2019-ITA.II DATED 14-8-2019 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) pl....
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.... 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 para3(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 specified in para 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 Genera....
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....r manually, albeit, without DIN. 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 which is not in conformity with paragraph 2 and 3 shall be treated as invalid and shall be deemed to have never been issued. The phraseology of paragraph 4 of the 2019 Circular fairly puts such communication, which includes communication of assessment order, in the category of communication which are non-est in law. 17.1. It is also well established that circulars issued by the CBDT in exercise of its powers under Section 119 of the Act are binding on the revenue. XXXXXXXXXXX 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 2019 Circular. 19. The object and purpose of the issuance of the 2019 Circular, as indicated hereinabove, inter alia, was to create an audit trail. Therefore, the communication relating to assessments, appeals, orders, etcetera which find mention in paragr....
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....sion, we note that the assessee therein challenged notices issued u/s. 153 of the Act and also assessment orders passed pursuant thereto under writ proceedings, is invalid for non-mentioning of DIN. The main challenge was that the satisfaction note dated 13-07-2021 bears no DIN and the impugned assessment order dated 28-09-2021 does not bear a DIN. Regarding non-mentioning of DIN on satisfaction note, it was contended that the covering letter along with which the satisfaction note was provided has a DIN but the copy of satisfaction note does not bear DIN and Hon'ble High Court held the circular is applicable to the satisfaction note dated 13-07-2021 issued by the respondent-revenue and the said satisfaction note will fall within the scope of para 2 of the circular as a communication. Further, the Hon'ble Court observed impugned assessment order does not bear a DIN, does not bear the required format set out in para 3 of the said circular and held assessment orders are invalid, deemed never to have been issued, by placing reliance in the case of Brandix Mauritius Holdings Ltd. reported in (2023) 149 taxmann.com 238 (Del.). 33. Thus, in the light of above ratio laid d....
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....rity is unsustainable in law. Approval under Section 151 of the I.T. Act, 1961, prior to initiation of proceedings under Section 148 of the I.T. Act, 1961 is a jurisdictional prerequisite. In the absence of such approval the proceedings would fall to the ground for want of jurisdiction. As such, the assessee is fully entitled to a copy of the order passed under section 151 of the I.T. Act, 1961 and correspondingly, the Assessing Officer is obliged to hand-over a copy of the same, as and when the assessee seeks for it." 35. On careful reading of the above, we note that the assessee therein contested, that the copy of approval u/s. 151 of the Act was not provided with the reasons recorded. The revenue contended that the approvals taken from higher authority are internal matter of the Department for communication and same cannot be provided. The Hon'ble High Court held that the approval u/s. 151 of the Act is a jurisdictional prerequisite and the assessee is fully entitled to have the same. It is established that a communication by way of approval u/s. 153D of the Act between Addl. CIT and the AO is not a internal communication, is a jurisdictional prerequisite covered by....
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....s Ltd. (supra) clearly underscored the binding nature of CBDT Circular No.19/2019 dated 14.08.2019 and stated in unequivocal terms that the assessment order passed without DIN is unsustainable in law owning to failure of the Department to allocate DIN and such failure cannot be regarded as an error which can be corrected by taking recourse of section 292B of the Act. The Hon'ble Delhi High Court explained the binding effect of CBDT Circular and held that in the light of CBDT Circular, any communication issued by any Income-tax Authority relating to assessment, appeals, orders, statutory or otherwise, explanations, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person on or after the first day of October, 2019 shall have no standing in law unless a computer generated Document Identification Number (DIN) has been allotted and is duly reflected in the body of such communication subject to exceptional circumstances referred to in para 3 of CBDT Circular. 18. The Hon'ble Calcutta High Court in PCIT vs. Tata Medical Center Trust (2023) 154 taxmann.com 600 (Cal.) after the closure of hea....