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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DLEHI
Before: SHRI G.S. PANNU & SHRI SAKTIJIT DEY
PER SAKTIJIT DEY, J.M.: This is an appeal filed by the Assessee against order dated 21.06.2022 of learned Commissioner of Income-tax (Appeals)-24, New Delhi pertaining to assessment year 2016-17.
2. In addition to the main grounds, by letter dated 09.05.2023 the assessee has raised following additional ground :
“On the facts and circumstances of the case, the assessment order is null and void as the same is in violation of CBDT Circular No.19/2019 requiring mandatory DIN.”
3. Since, the additional ground raises a purely legal and jurisdictional issue going to the root of the matter and can be decided without making investigation into fresh facts, we are inclined to admit the additional ground for adjudication.
4. Briefly, the facts are, the assessee is a resident individual. Pursuant to a search and seizure operation conducted in respect of a third party, certain incriminating materials belonging to the assessee were found.
Consequent thereupon, proceedings u/s. 153C of the Act were initiated on the assessee. In response to notice issued u/s. 153C of the Act, the assessee filed his return of income under section 139(1) of the Act declaring total income of Rs.5,12,340/-. Based on the material found in course of search and seizure operation conducted on the third party, the Assessing Officer ultimately completed the assessment by determining total income at Rs.24,04,625/- after making addition of Rs.18,92,285/- on account of commission paid for availing accommodation entry. Though, the assessee contested the addition by filing an appeal, however, he was unsuccessful.
Before us, learned counsel appearing for the assessee drew our attention to the assessment order and submitted that the assessment order issued manually does not contain any Document Identification Number(DIN), which is mandatory for any communication issued after 1st October, 2019. He submitted, though, the assessment order was passed on 24.12.2021, however, the Assessing Officer issued DIN through a separate communication dated 03.02.2022, which demonstrates that the DIN was not issued within a period of 15 working days of the issuance of the assessment order. Further, he submitted, in the body of the assessment order, the Assessing Officer has not recorded the reasons for issuing the assessment order manually without DIN and number & date of approval granted by Chief Commissioner/Director General of Income- tax for issuing the assessment order manually without DIN. Drawing our attention to Circular No. 19/2019 dated 14.08.2019, learned counsel submitted, as per paragraph 4 of the said Circular, any communication, which is not in conformity with the conditions prescribed in paragraph 2 and 3 of the Circular, shall be treated as invalid and shall be deemed to have never been issued. Thus, he submitted, the assessment order, having been issued without satisfying the conditions of paragraph 2 and paragraph 3 of the Circular, has to be treated as invalid. In support of such contention, learned counsel relied upon the following decisions :
(i). M/s. Brandix Mauritius Holdings Ovs. V. DCIT, 2022(11)TMI 34 (ITAT Delhi). (ii). CIT v. Brandix Mauritius Holdings Ltd., 2023(4)TMI 579 (Delhi High Court) (iii). Dilip Kothari v. PCIT, 2022(11) TMI 33 (ITAT Bangalore) (iv). Sh. H.K. Suresh v. PCIT, 2022(12) TMI 744 (ITAT Bangalore) (vi). Tata Medical Centre Trust v. CIT, 2022(7) TMI 1334 (ITAT Kolkata)
6. Learned counsel submitted, since, the Circular issued by CBDT is binding on the Assessing Officer, the Assessing Officer could not have violated the conditions of such circular. Thus, he submitted, the assessment order should be quashed, being invalid.
Learned Departmental Representative submitted, though, the Assessing Officer issued the assessment order manually without DIN due to certain technical exigencies, however, the assessment order was issued with prior approval of CCIT and the Assessing Officer has issued the DIN within specified time limit. Thus, he submitted, the assessment order is in full compliance with the CBDT Circular.
We have considered rival submissions and perused the materials on record. We have also applied our mind to the decisions relied upon.
Undisputedly, the impugned assessment order was passed on 24.12.2021 and was communicated by the Assessing Officer to the assessee manually without generating a DIN. Of course, subsequently, the Assessing Officer issued one more communication dated 03.02.2022 to the assessee generating the DIN of the assessment order. The issue, which arises for consideration is, whether, the subsequent communication issued by the Assessing Officer generating the DIN in respect of the assessment order will satisfy the conditions of CBDT Circular No. 19/2019 dated 14.08.2019 and cure the deficiency in issuing the assessment order manually without generating the DIN.
For arriving at a proper conclusion in this regard, it is necessary to look into the contents of Circular No. 19/2019 dated 14.08.2019 issued by the CBDT, which are as under :
“Circular No. 19 /2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th of August, 2019
Subject: Generation/Allotment/Quoting of Document Identification Number in Notice/Order/Summons/Ietter/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 fax 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.
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, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc, to the assessee or any other person, on or after the 1SI day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication.
In exceptional circumstances such as, —
(i) when there are technical difficulties in generating/allotting/quoting the DIN and issuance of communication electronically;, or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, tor discharging, his Official duties: or (iii) when due to delay in PAN migration, PAN is lying with nor.- jurisdictional Assessing Officer; or (iv) when PAN of assesses is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated: or (v) When the functionality to issue communication is net available in the system, the communication may be issued manually but only after recording reasons in writing in the file and with prior written approval of the Chief Commissioner / Director General of income-tax. In cases where manual communication is required to be issued due to delay in PAN migration, the proposal seeking approval for issuance of manual communication shall include the reason for delay in PAN migration. The communication issued under aforesaid circumstances shall stale the fact that the communication is issued manually without a DIN and the date of obtaining of the written approval of 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 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 .... ”
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.
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. Sd/- (Sarita Kumari) Director (ITA, II) CBDT (F.No. 225/95/2019-1TA.H)
Copy lo:- i. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F) ii. PS to Secretary (Revenue) iii. Chairman, CBDT & All Members. CBDT iv. All Pr.CCslT/Pr.DsGIT v. All Joint Secretaries/CslT, CBDT vi. C&AG vii. CIT (M&TP), Official Spokesperson of CBDT viii. O/o Pr. DGIT(Systems) for uploading on official website ix. Addl.CIT (Database Cell) for uploading on the departmental website