2023 (10) TMI 1341 - AT - Income Tax

Non-quoting computer-generated DIN in the body of impugned orders - whether such legal ground raised first time before the Tribunal can be admitted?' more specifically when it was not raised before the first appellate authority but the subject matter of impugned orders assailed against - HELD THAT - Admittedly no new facts are required to be investigated or verified for this purpose, therefore such being a bald legal ground requiring no examination of facts a fresh, in our considered view deserves admission in the light of ratio laid down in 'CIT vs. National Thermal Power Company Ltd.' 1996 (12) TMI 7 - SUPREME COURT and 'Gedore Tools Pvt Ltd. vs. CIT' 1999 (2) TMI 55 - DELHI HIGH COURT . After due consideration of assessee's plea and submission, we are satisfied that, omission to raise legal ground while filing present appeals were neither wilful nor unreasonable, for the reason we deem it fit to admit the same in the light of judicial precedents laid in 'Jaora Sugar Mills Pvt. Ltd v CIT' 1979 (8) TMI 34 - MADHYA PRADESH HIGH COURT , and 'CIT v Western Rolling Mills Pvt. Ltd.' 1984 (9) TMI 19 - BOMBAY HIGH COURT and 'Jute Corporation of India Ltd. v CIT' 1990 (9) TMI 6 - SUPREME COURT and 'Ahmedabad Electricity Co. Ltd. v CIT' 1992 (4) TMI 29 - BOMBAY HIGH COURT ergo same stands admitted. Validity of orders issued without DIN - We find this issue is no-more res-integra by the ratio in 'Ashok Commercial Enterprises vs. ACIT' 2023 (9) TMI 335 - BOMBAY HIGH COURT wherein their lordships have categorically held that, the communication of orders without quoting DIN therein are to be treated as invalid and deemed never to have been issued. intimation of DIN by separate letters communicated within 15 days of issuance of former DIN less communication would be valid only if, former DIN less communication is issued incorporating therein the reason for issue of such DIN less communication in terms of para 3(i) to 3(v) as applicable alongwith the Number date of obtaining written approval of the Chief Commissioner/Director General of Income-Tax in a specified format, and not otherwise. In the present bunch of appeals we note that, the impugned orders were subject matter of DIN compliance; however same are found communicated without mentioning or quoting therein (1) computer-generated DIN and (2) reasons and approval therefor. Thus impugned orders were communicated in violation of Para-2 Para-3 of CBDT Circular (supra), hence rendered invalid as if it has never been issued, therefore ceases to have any effect in the eyes of law as non-est.

Summary

Issues Involved:
1. Non-quoting of computer-generated Document Identification Number (DIN) in the impugned orders.
2. Admissibility of a legal ground raised for the first time before the Tribunal.

Summary:

Non-quoting of DIN:
The core issue in these nineteen appeals (five by different assessees and fifteen by Revenue) revolves around the non-quoting of the computer-generated Document Identification Number (DIN) in the impugned orders. The assessees argued that the orders were communicated without mentioning DIN, violating Circular No.19/2019 issued by the Central Board of Direct Taxes (CBDT). The Revenue countered that DIN was communicated separately within 15 days, thus complying with the Circular.

Admissibility of Legal Ground:
The Tribunal first addressed whether the legal ground raised for the first time before it could be admitted. It concluded that since the legal ground challenges the validity of the impugned orders and does not require new facts to be investigated, it deserves admission. This decision was supported by precedents from the Hon'ble Apex Court and various High Courts.

Compliance with CBDT Circular:
The Tribunal examined the CBDT Circular No. 19/2019, which mandates the generation, allotment, and communication of DIN for all communications by income tax authorities. The Circular allows for manual communication under exceptional circumstances, provided reasons are recorded and prior approval is obtained. Any communication not conforming to these requirements is deemed invalid.

Judicial Precedents:
The Tribunal referred to several judicial precedents, including the Hon'ble Supreme Court's decision in 'K.P. Varghese vs. ITO' and 'Back Office IT Solutions Pvt. Ltd. vs. UOI', which emphasized that CBDT circulars bind the Revenue. The Tribunal also cited the Hon'ble Bombay High Court's ruling in 'Ashok Commercial Enterprises vs. ACIT', which held that orders issued without quoting DIN are invalid and deemed never to have been issued.

Conclusion:
The Tribunal concluded that the impugned orders were communicated without mentioning DIN and without stating the reasons for issuing DIN-less communication along with the required approvals. Therefore, the orders were deemed invalid and non-est. Consequently, the first five appeals by the assessees were allowed, and the remaining appeals by the Revenue were dismissed.

Pronouncement:
The orders were pronounced in open court on Tuesday, 31st October 2023.