2023 (11) TMI 1224 - AT - Income Tax

Assessment order without quoting DIN - HELD THAT - The object and purpose of the issuance of the 2019 Circular, inter alia, was to create an adult trail. Therefore, the communication relating to assessments, appeals, orders etcetra 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. Assessee appeal allowed.

Summary

Issues Involved:
1. Assumption of jurisdiction u/s 153A.
2. Validity of approval obtained u/s 153D.
3. Addition based on alleged bogus purchases.
4. Non-compliance with CBDT Circular No. 19/2019 regarding Document Identification Number (DIN).

Summary:

Issue 1: Assumption of Jurisdiction u/s 153A
For both A.Y. 2015-16 and 2016-17, the assessee contested the assumption of jurisdiction u/s 153A, arguing that the addition was made without any incriminating material detected as a result of the search. The Tribunal found that the assessment lacked the necessary jurisdictional basis.

Issue 2: Validity of Approval u/s 153D
The assessee claimed that the approval obtained u/s 153D was mechanical, illegal, and invalid, rendering the assessment order u/s 153A/143(3) invalid and without jurisdiction. The Tribunal did not specifically address this issue in the order.

Issue 3: Addition Based on Alleged Bogus Purchases
For A.Y. 2015-16, the Commissioner of Income Tax (Appeals) upheld an addition of Rs. 10,25,100/- by applying a GP rate of 25% on alleged bogus purchases from M/s Yash Trading Company. Similarly, for A.Y. 2016-17, an addition of Rs. 8,13,549/- was upheld. The assessee argued that the purchases were supported by bills and necessary evidence, and the conclusion of bogus purchases was contrary to the facts and evidence on record. The Tribunal did not specifically address this issue in the order.

Issue 4: Non-Compliance with CBDT Circular No. 19/2019
The additional ground raised by the assessee was that the assessment order was null and void due to non-compliance with CBDT Circular No. 19/2019, which mandates the inclusion of a Document Identification Number (DIN). The Tribunal observed that the assessment orders dated 30.12.2019 for both A.Y. 2015-16 and 2016-17 did not mention a DIN, making the orders invalid as per the CBDT Circular.

The Tribunal referred to the CBDT Circular No. 19/2019, which mandates that any communication without a DIN is to be treated as invalid and deemed never to have been issued. This interpretation was upheld by the Hon'ble Delhi High Court, which confirmed that non-compliance with the DIN requirement renders the assessment order null and void.

Decision:
The Tribunal held that the assessment orders dated 30.12.2019 for both A.Y. 2015-16 and 2016-17 were null and void due to the absence of a DIN, following the mandate of the CBDT Circular No. 19/2019. The appeals of the assessee were allowed, with liberty given to the revenue to approach the Tribunal if it can demonstrate that the assessment orders fall within the exceptions provided in the CBDT Circular. The decision was announced in the open court on 22.11.2023.