2022 (7) TMI 1334 - AT - Income Tax

Revision u/s 263 by CIT - Whether order passed by the Ld. PCIT is null and void as it fails to mention any DIN number on its body or adhere to Circular No. 19/2019 by the CBDT? - HELD THAT - We note that it is an undisputed fact that the impugned order u/s. 263 of the Act has been issued manually which does not bear the signature of the authority passing the order. Further, from the perusal of the entire order, in its body, there is no reference to the fact of this order issued manually without a DIN for which the written approval of Chief Commissioner/Director General of Income-tax was required to be obtained in the prescribed format in terms of the CBDT circular. We also note that in terms of para 4 of the CBDT circular, such a lapse renders this impugned order as invalid and deemed to have never been issued. It is also important to note about the binding nature of CBDT circular on the Income-tax Authorities for which gainful guidance is taken from the decision of Hon ble Supreme Court in the case of CIT v. Hero Cycles 1997 (8) TMI 6 - SUPREME COURT wherein it was held that circulars bind the ITO but will not bind the appellate authority or the Tribunal or the Court or even the assessee. The department, CBDT circular and the judicial precedents including that of Hon ble Supreme Court and the jurisdictional High Court of Calcutta, we are inclined to adjudicate on the additional ground in favour of the assessee by holding that the order passed by the Ld. CIT(E) is invalid and deemed to have never been issued as it fails to mention DIN in its body by adhering to the CBDT circular no. 19 of 2019. Accordingly, additional ground taken by the assessee is allowed. Having so held on the legal issue raised by the assessee in the additional ground, the grounds relating to the merits of the case requires no adjudication. Accordingly, the appeal of the assessee is allowed in terms of above observations and findings. Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Jurisdiction of CIT(E) to invoke provisions of section 263 of the Income-tax Act.
3. Validity of the order passed by CIT(E) without a Document Identification Number (DIN).

Detailed Analysis:

Condonation of Delay:
The appeal was filed with a delay of 61 days due to the COVID-19 pandemic. The Supreme Court had directed that the period from 15.03.2020 to 28.02.2022 be excluded for computing the limitation period. Considering this directive and the explanation provided by the assessee, the delay was condoned, and the appeal was admitted for adjudication.

Jurisdiction of CIT(E) under Section 263:
The primary ground of the appeal was the challenge to the jurisdiction assumed by CIT(E) for invoking section 263 of the Income-tax Act. The assessee also raised an additional ground concerning the validity of the order due to the absence of a DIN, which was admitted by the Tribunal as it went to the root of the matter.

Validity of the Order Without DIN:
The additional ground raised by the assessee contended that the order passed by CIT(E) was null and void as it did not contain a DIN, violating CBDT Circular No. 19/2019. The Tribunal examined the circular, which mandates that all communications issued by the Income-tax Department must contain a DIN unless issued under exceptional circumstances, which must be explicitly mentioned in the communication.

The Tribunal noted that the impugned order was issued manually and did not mention any exceptional circumstances or approval for not quoting a DIN. As per para 4 of the circular, any communication not in conformity with the circular is deemed invalid and considered never issued. The Tribunal found that the impugned order failed to adhere to these requirements, rendering it invalid.

Conclusion:
The Tribunal concluded that the order passed by CIT(E) was invalid due to the absence of a DIN and non-compliance with the CBDT circular. Consequently, the additional ground raised by the assessee was allowed, and the appeal was decided in favor of the assessee. The grounds relating to the merits of the case were not adjudicated due to the decision on the legal issue. The appeal was pronounced allowed on 18th July 2022.