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Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee against the order under section 263 of the Income Tax Act, 1961 dated 28.02.2022 for A.Y.2017-18 passed by Ld.Pr.CIT-2, Pune.
The ld.AR raised a legal ground (in addition to other grounds) as under : M/s EHealth System Health-Care Ltd., [A] “1. On the facts and in the circumstances of the case and in law the revision order u/s 263 is invalid and bad in law in as much as the Order u /s 263 does not bear DIN and is not passed in conformity with the mandatory requirement of Circular No.19 of 2019.”
Submission of ld.AR : 3. The ld.Authorised Representative for the assessee submitted that the order under section 263 of the Act does not bear DIN Number on it. The ld.AR submitted that therefore the order is bad in law. The ld.AR relied on the order of Hon’ble jurisdictional high court in the case of Ashok Commercial Enterprises Vs. ACIT in Writ Petition No. 2595 of 2021. The ld.AR read out relevant portion of the Hon’ble High Court’s order. The ld.AR made an elaborate submission on the merits of the case.
Submission of ld.DR: 4. The ld.Departmental Representative of the Revenue filed a letter dated 14.08.2023 issued by ld.Pr.CIT-1, Pune regarding the legal ground raised by the assessee. The relevant part of the said letter is reproduced here as under:
03. It is to inform that the case was earlier assessed with Pr.CIT-2, Pune and received on transfer to the undersigned .on 04-/08/2023 i.e. subsequent to the order u/s263 of the Act.
2 M/s EHealth System Health-Care Ltd., [A]
After verification of the record received from the Pr.CIT-2, Pune and the details available on the ITBA portal, the comments of the undersigned on the additional grounds are as under : Additional Ground No.1 : On the facts and in the circumstance of the case and in law the revision order u/s. 263 is invalid and bad in law in as much as the order u/s. 263 does not bear DIN and is not passed in conformity with the mandatory requirement of circular No. 19 of 2019. Comments It is seen from the details available on ITBA Portal that 02 DINs were generated in ITBA portal in respect of the order dated 28/02/2022 under section 263 of the Act i.e. one for “intimation letter and another for scanned copy of the order itself. The DIN ITBA/OOM/S/91/2021-22/1040182737(1) is generated for the intimation letter wherein the DIN viz. ITBA/COM/M/17/2021- 22/1040182673(1) of the order u/s 263 has been informed to the assessee. Both the DINs pertain to 28/02/2023. It is also seen from the ITBA portal that the scanned copy of the order (NcordBiotech.pdf), itself is sent to the assessee vide the second DIN i.e. ITBA/COM/M/17/2021-22/1040182673(1) dated 28/02/2022 through ITBA portal at 08:01:56 PM which is delivered through email on 28/02/2022 at 08:02:09 PM. The relevant screen shots of DIN numbers and delivery through email arc enclosed. Further, the date of order is 28/02/2022 and the same has been issued through ITBA portal on 28/02/2022 itself. In view of the above, this is not a case where only DIN is generated through ITBA and the order is sent manually but the copy of the order itself is sent through ITBA portal electronically. Thus, the communication- in this case has duly been issued through ITBA Portal electronically and there is a proper audit trail of the communication in the ITBA portal. Thus, the provisions of communication in the ITBA portal. Thus, the provisions of Circular No.19/2019 dated 14/08/2019 have duly been followed.”
3 M/s EHealth System Health-Care Ltd., [A] Findings &Analysis : 5. We have heard both the parties and perused the records. We are admitting the legal ground raised by the assessee as it goes to the root of the issue. All the facts related to the legal grounds are already on record.
We are deciding first the legal ground raised by the assessee, regarding DIN.
On perusal of the order under section 263 of the Act dated 28.02.2022, it is observed that nowhere in the order, Document Identification Number (DIN) generated by Computer is mentioned. The order have following number as under :
The number mentioned on the order is not computer generated. The CBDT vide Circular number 19/2019 dated 4 M/s EHealth System Health-Care Ltd., [A] 14/08/2019 issued under Section 119 of the Income tax Act has made it mandatory that with effect from 1/10/2019, every order, Communication issued by the Income tax Authorities to the Assessee shall have a computer-generated Document Identification Number (DIN) duly quoted in the body of the order/Communication. The circular in para 4 has mentioned that Communication issued, which is not in conformity of para 2 and 3 of the circular shall be deemed to have never been issued.
The Circular issued by CBDT is mandatory.
In this case the Body of the order u/s 263 does not have a computer-generated document identification number (DIN). The department has generated DIN separately and communicated to the assessee with the order. However, as per CBDT circular para 3 & 5 in such situation, written approval of the Chief Commissioner of Income Tax/Director General of Income Tax shall be obtained and shall be mentioned in such order. No such approval has been mentioned in the impugned order under section 263 of the Act. The Department has not filed copy of any such approval issued by Chief Commissioner of Income Tax/Director General of Income Tax as per Circular No.19 of 2019. Therefore, the DIN separately 5 M/s EHealth System Health-Care Ltd., [A] generated has not been duly authenticated as per the procedure laid down in Circular No.19 of 2019 and hence does not have any statutory back up. Therefore, the impugned order under section 263 does not have DIN and is in violation of Circular No.19 of 2019. 8.1 The Hon’ble Jurisdictional High Court in the case of Ashok Commercial Enterprises Vs. ACIT in Writ Petition No.2595 of 2021(supra) has held as under: “(b) It is indisputable that the impugned assessment order dated 28th September 2021 does not bear a DIN and further that the said order issued without a DIN does not bear the required format set out in paragraph 3 of the Circular and, therefore, the impugned assessment orders for Assessment Year 2011-2012 to 2019-2020 ought to be treated as invalid and deemed never to have been issued. We find support for this view in Brandix Mauritius Holdings Ltd. (Supra) where the Hon’ble Delhi High Court has held that an order passed in contravention of the said Circular is void, bad in law and of no legal effect. Paragraphs 16 to 17.1, 18 and 19 read as under : 16. The final assessment order was passed by the Assessing Officer (AO) on 15.10.2019, under Section 147/144(C) (13/143(3) of the Act. Concededly, the final assessment order does not bear a DIN. 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 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 6 M/s EHealth System Health-Care Ltd., [A] 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.
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 paragraph 2 of the 2019 Circular, albeit without DIN, can have no standing in law, having regard to the provisions of paragraph 4 of the 2019 Circular. (c) During the course of hearing, Mr. Suresh Kumar produced an intimation letter dated 13th October 2021 stating that the order dated 28th September 2021 under Section 153C of the Act has a DIN, which is set out therein. Even if this is held to be in compliance with paragraph 5 of the Circular, which deals with regularization of communications without DIN, this can only seek to regularize the failure to generate a DIN, but yet the requirements of paragraph 3 of the Circular will still remain contravened and consequently, the order dated 28th September 2021 ought to be treated as invalid and never issued; (d) The said Circular also applies to the satisfaction note dated 13th July 2021 issued by respondent no.1. The 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 regularization 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 7 M/s EHealth System Health-Care Ltd., [A] 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;”
Thus, the Hon’ble Bombay High Court has categorically held that in view of binding nature of Circular issued under section 119 of the Act, contravention of Circular No.19/2019 makes the order invalid and deemed never to have been issued. Therefore, respectfully following the Hon’ble Bombay High Court, the impugned order under section 263 of the Act, dated 28.02.2022 is held to be invalid and never to have been issued. Accordingly, Legal Ground No.1 raised by the assessee is allowed.
9.1 Since we have allowed the Legal Ground raised by the assessee, all other grounds become academic in nature. Therefore, we do not intended to adjudicate those grounds.