TaxTMI 
TaxTMI 
2026 (10) TMI 500
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.... 143(3) and 254 of the Act, following directions issued by the Dispute Resolution Panel-1, Bangalore [ The Ld. DRP] on 23 December 2022. The assessee's income was determined at Rs. (16,07,75,000). 2. The relevant facts are that i. the assessee filed its return of income for the assessment year under consideration on 26 September 2009, declaring a loss of Rs. 65,678,867. The return was selected for scrutiny, and the matter was referred to the Transfer Pricing Officer to determine the arm's length price of the international transactions. ii. By order dated 29 January 2013, passed under section 92CA of the Act, the Deputy Commissioner of Income Tax, Transfer Pricing-IV, Bangalore ("the TPO"), made an adjustment of Rs. 59,444,884. iii. Consequently, a draft assessment order was passed on 30 April 2013 under section 143(3) read with section 144C of the Act. iv. Aas the Assessee did not file any Objection before the DRP, the ld Ao passed the final assessment order u/s. 143(3) rws 144C of the act on 30/04/2013. v. The assessee appealed before the Commissioner of Income Tax (Appeals)-14, Bangalore ("the CIT(A)"), who disposed of the appeal by....
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....irector of the assessee company. 4. The learned authorised representative, Shri Tata Krishna, Advocate, strongly supported the condonation petition and submitted that the delay was due to sufficient cause. 5. The learned Commissioner of Income Tax-Departmental Representative, Dr. Divya K. J., opposed the petition and submitted that the assessee had not shown sufficient cause for the delay. 6. We have carefully considered the rival contentions and examined the reasons advanced by the assessee in its condonation petition. The assessee submitted that the assessment order was neither served electronically nor manually, and therefore it was unaware that an appeal was required. The assessee became aware of the order only when the Assessing Officer issued notices in the penalty proceedings. Thereafter, the assessee filed the appeal on 19 May 2023. Considering the 54-day delay, we find that sufficient cause has been shown, as the assessee was unaware of the order's passing. Although uploading the assessment order to the ITBA portal may generate an SMS alert and constitute statutory service, which the assessee did not dispute, it was submitted that the assessee could file the appea....
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....icated, neither the decision of the Hon'ble Karnataka High Court nor the retrospective amendment would apply. ii. Referring to Circular No. 19/2019, it is emphasized that compliance with the circular is mandatory. According to the circular, if the DIN is not included in the DRP directions themselves but is communicated only through a separate letter, such communication does not satisfy the circular. He further contended that the retrospective amendment does not cure cases where the DRP directions do not contain the DIN and the assessee is merely informed of the directions through a separate intimation letter. It is thereafter referred to several colour prints in cases of different assessee, in which the DIN No. pointed out is not authenticated by the website of the Income Tax Department. He referred to the mechanism of authentication, stating that when the assessee tries to authenticate the respective documents, it does not authenticate them. It is submitted that the main purpose of the DIN provisions is authentication. Therefore, it was submitted that in the absence of such authentication, the requirement of the circular as well as the retrospective amendment is not fulfi....
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....iii. Further, they referred to the various circulars that provide for the generation of document identification No. In this case, they referred to the paper book submitted in one of the group cases. It was argued that the retrospective amendment to the provisions of section 292BA cures only defects in 'quoting' the document identification No., not defects in the facts or in its 'generation'. ix. They referred to Circular No. 19 dated 14 August 2019, which imposes two distinct obligations on the income tax authority, namely the 'generation of the computer-generated document identification No.' and the 'quoting' of such numbers in the body of the communication. These are separate and sequential steps, and therefore generation precedes quoting, as it is a precondition for quoting such document identification No.; a defect at either stage renders the communication non-compliant with the law, and therefore such document, order, and directions deserve to be quashed. x. They referred to the memorandum explaining the provision of the Finance Bill 2026, in which he stated that there are many judgments of the honourable High Court in which assessments have been held invalid....
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....sue is covered by the decision of the Hon'ble Karnataka High Court in Principal Commissioner of Income-tax v. Unisys India (P.) Ltd. [2026] 188 taxmann.com 635 (Karnataka), dated 7 July 2026. He further submitted that section 292BA, inserted by the Finance Act, 2026 with retrospective effect from 1 October 2019, also applies and therefore ground No. 4 deserves to be dismissed. ii. Referring to the Karnataka High Court's decision, he explained the background of DIN issuance and submitted that the circular's requirements are met where the identity and existence of the document are sufficiently established. iii. He read extensively from the judgment and argued that, as a decision of the jurisdictional High Court, it is binding on the Tribunal and concludes the issue. iv. He also relied on section 292BA of the Act, which provides that an assessment order shall not be invalid merely because of any mistake, defect, or omission in quoting the computer-generated Document Identification Number, if the order is otherwise referenced by such number in any manner. v. In the present case, he submitted that the assessee was informed of the DRP's directions date....
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....e Hon'ble Karnataka High Court has decided the issue of non-quoting of the Document Identification Number in Principal Commissioner of Income-tax v. Unisys India (P.) Ltd. [2026] 188 taxmann.com 635 (Karnataka), dated 7 July 2026, holding in paragraph 46 as follows: "46. In the light of the foregoing discussion and for the reasons recorded hereinabove, we hold that an incorrect mention of the DIN in the order would not invalidate the order when the accompanying intimation letter contains the correct DIN pertaining to such order. CONCLUSION:- (i) The requirement of quoting a Document Identification Number (DIN) in communications issued by the Income Tax Department, as contemplated under Circular No.19/2019 dated 14.08.2019, is mandatory. (ii) Where the DIN is subsequently communicated through an intimation and such intimation bears its own DIN while also referring to the DIN of the enclosed order, the order cannot be held to be invalid merely on the ground that the DIN was not originally reflected in the communication. An order would attract invalidity under Circular No.19/2019 only where no DIN is generated or communicated at all. (iii) ....
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....tain grounds. It is proposed to insert a new section 292BA so as to clarify that no assessment under any of the provisions of the said Act shall be invalid or shall be deemed to have been invalid on the ground of any mistake, defect or omission in respect of quoting of a computer-generated Document Identification Number, if the assessment order is referenced by such number in any manner. This amendment will take effect retrospectively from 1st October, 2019" 17. The memorandum explains the above amendment as follows: Assessments not to be invalid on ground of any mistake, defect or omission on account of computer-generated DIN, if such assessment is referenced by computer generated DIN in any manner. Section 292B of the Income-tax Act, 1961 states that no return of income, assessment, notice, summons or other proceeding in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformi....
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....ay of October 2019. The amendment in Income-tax Act 2025 shall come into force with effect from 1st day of April 2026. [Clause 26, 106] 18. It is necessary to refer to circular C NO. 4/2026 [F. NO. 370142/14/2026-TPL], DATED 31-03-2026, which explains the provisions of section 292BA of the Act as under: - CIRCULAR NO. 4/2026 [F. NO. 370142/14/2026-TPL], DATED 31-3-2026 In exercise of powers conferred on the Central Board of Direct Taxes ('the Board') by section 119 of the Income-tax Act, 1961 and in view of the section 292B and the amendments made in the Income-tax Act, 1961 (insertion of section 292BA) and also in the Income-tax Act. 2025 [section 522] by the Finance Act, 2026, it is specified that the requirement of a computer generated Document Identification Number (DIN) by any income-tax authority referred to in clause (aa) to clause (h) of section 116 of the Income-tax Act, 1961. shall be in the manner laid down in this circular. Accordingly, the Circular No. 19/2019, dated 14.08.2019 on this subject shall cease to have effect from the date of issue of this circular. 2. Referencing by Document Identification Number (DIN) by an income-t....
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....he competent authority for communication issued by an income-tax authority below the rank of Joint Commissioner/Joint Director shall be Joint Commissioner / Joint Director / Additional Commissioner/ Additional Director of Income-tax (ii) the competent authority in any other case not covered under clause (i) shall be Chief Commissioner /Director General of Income-tax. 6. The communication issued in the situations specified in para 3(a), 3(b) & 3(c) above shall be, within 15 working days of its issuance, uploaded on the System along with appropriate referencing by DIN by the issuing income-tax authority. 19. Thus, Circular No. 4/2026 merely prescribes the procedure for referencing documents with effect from 1 April 2026 and clarifies that Circular No. 19/2019 continued to operate until that date. The Hon'ble Karnataka High Court has taken the same view. 20. Further, the manner in which the Document Identification Number is generated or obtained is irrelevant to the validity of the assessment order or document. It is an internal mechanism of the Income Tax Department and an administrative guideline and cannot be used to distinguish the decision of the Hon'ble Karn....
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....BA. Notwithstanding anything contained in any judgment, order or decree of any court, for the removal of doubts, it is hereby clarified for the purposes of section 292B that no assessment under any of the provisions of this Act shall be invalid or shall be deemed to have been invalid on the ground of any mistake, defect or omission in respect of quoting of a computer generated Document Identification Number, if the assessment order is referenced by such number in any manner.". 13. From bare perusal of the above provision and also considering the intent of the legislature, we find that the purpose of introducing section 292BA of the Act is mainly that the assessment orders passed under the provisions of this Act should not be held to be invalid or shall be deemed to have been invalid on the ground of any mistake, defect or omission in respect of quoting of a computer generated DIN if the assessment order is referenced by such number in any manner. Now the contention of ld. Counsel for the assessee is that the approval u/s. 153D of the Act does not contain DIN therefore such approval is bad in law and invalid making the impugned assessment order invalid and bad in law. Ld. C....
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.... 26. In view of the foregoing, we find no merit in the assessee's ground No. 4, by respectfully following the decision of the Hon'ble Karnataka High Court and for the reasons relating to the retrospective amendment introducing section 292BA of the Act. 27. Turning to the next ground of appeal, it is necessary to record certain relevant facts. The assessee is engaged in the manufacture and sale of furniture-making machinery, components, and parts. It filed its return of income on 26 September 2009, declaring a loss of Rs. 65,678,867. The return was selected for scrutiny, and, because the assessee had entered into international transactions, the matter was referred to under section 92CA of the Act to the Transfer Pricing Officer for determination of the arm's length price. The Transfer Pricing Officer passed an order under section 92CA (3) on 29 January 2013, proposing an adjustment of Rs. 59,444,844 to the arm's length price of the international transactions. Based on that order, the Assessing Officer passed a draft assessment order on 5 March 2013. The assessee, by letter dated 9 April 2013, stated that it did not wish to file objections before the Dispute Resolution Panel, and ....
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....resentative, explained that the ITAT order was issued on 18 October 2019 and received by the Commissioner on 18 November 2019. Citing paragraphs 17 to 23 of that order, he pointed out that certain issues had been sent back to the AO/TPO's file. He also relied on section 153(5) of the Act to argue that when an order is to be implemented through a new assessment, reassessment, or order under section 92CA, it must be made within three months from the end of the month in which the appellate order is received. Since the Commissioner received the ITAT order on 18 November 2019, he contended that the assessment should have been completed by 28 February 2020. The second proviso to section 153(5), which applies when verification or an opportunity of hearing is needed, was also referenced; he stated that in such cases, the time limit under section 153(3) is applicable. He observed that, in paragraph 18, the coordinate bench directed the taxpayer to demonstrate capacity under-utilisation and allowed the possibility of using the tolerance range. Following this, the Transfer Pricing Officer issued a notice for verification. Therefore, he argued that the second proviso made section 153(3) ap....
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....inst the order of the Assessing Officer. Accordingly, any matter remanded by the ITAT could have been restored only to the Assessing Officer. 35. This is also mandated by Rule 28 of the Income-tax (Appellate Tribunal) Rules, 1963, which provides as follows: "Remand of the case by the Tribunal. 28. Where the Tribunal is of the opinion that the case should be remanded, it may remand it to the authority from whose order the appeal has been preferred or to the 29b[Assessing Officer], with such directions as the Tribunal may think fit." 36. The ITAT's direction, issued without due regard to its procedural rules, understandably caused confusion. To the extent the matter was restored to the Transfer Pricing Officer, it was contrary to rule 28 of the Income-tax (Appellate Tribunal) Rules. On this point, the learned CIT-DR's submissions are well founded. 37. Be that as it may, since the ITAT's order has attained finality, there is no dispute that section 153(3) applies. The coordinate bench directed the lower authorities to grant the assessee an opportunity of hearing and, accordingly, under the second proviso to section 153(5), the limitation period is govern....
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....s unnecessary. The Revenue therefore cannot invoke section 153(4) to claim a further 12-month extension, up to 31 March 2022, for passing the draft assessment order; such an extension is not permissible in law. 41. If the learned CIT-DR's argument were accepted, the draft assessment order dated 30 March 2022 would fall within the extended limitation period ending on 31 March 2022 under section 153(4), read with section 144C of the Act and the retrospective insertion of subsections 4A, 4B, 13A and 13B by the Finance Act, 2026. However, that consequence would arise only if, in these circumstances, the Assessing Officer were entitled to the benefit of section 153(4). As held above, when the issue is restored to the file of the Assessing Officer for determination of the arm's length price, no fresh reference to the TPO, with approval of the Principal Commissioner or Commissioner, is required to extend the limitation period by a further 12 months. 42. In light of the foregoing, the assessment order dated 24 January 2023, passed by the Assessing Officer under section 143(3) read with sections 254 and 144B of the Income-tax Act, 1961, ought to have been passed on or before 31 March ....