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2023 (5) TMI 835 - AT - Income TaxValidity of Revision u/s 263 - non mentioning computer generated DIN - violation of the procedure prescribed by the CBDT - Legal existence of the order passed without the Document Identification Number (DIN) basing on the Circular No. 19/2019 - HELD THAT - A reading of the CBDT Circular No. 19/2019, dated 14/08/2019 clearly shows that with effect from 01/10/2019, all the communication shall contain the computer generated DIN, without which, vide paragraph No.4 thereof, such a communication shall be deemed to have never been issued. Paragraph 3, however, refers to five exceptional circumstances. As stated therein that in such exceptional circumstances, the communication may be issued manually, but shall contending a statement referring to the exceptional circumstances and also the fact that it was so issued without DIN with the approval of the Chief Commissioner/Director General of Income Tax. There are two documents before us. One is the order dated 23/03/2020 passed under section 263 of the Act and the other is a communication dated 02/06/2020. The communication dated 02/06/2020 states that the order under section 263 of the Act dated 23/03/2020 was having a particular DIN. But the question is whether such a later reference will relate back to the date of order i.e., 23/03/2020 passed u/s 263 and validates the same. Since it is not the case of Revenue that DIN was generated on 23/03/2020 and the document dated 02/06/2020 is not specific on this aspect, we are of the considered opinion that it is imperative for us to look at the circumstances under which the DIN was generated separately. Neither the order u/s 263 nor the communication dated 02/06/2020 spell out the reasons for not either generating the DIN or quoting the same in the order dated 23/03/2020. Circular categorically mentions that subsequent to 01/10/2019, the computer generated DIN not only be allotted but be duly quoted in the body of the communication itself. In the communication dated 23/03/2020 any reference to DIN is conspicuously absent. To meet the events where the computer generated DIN could not be generated on the date of issuance of communication, five exceptions are provided by paragraph 3 of the circular. It is also specifically stated that if the case of the Revenue falls in any of these exceptions, the said fact has to be recorded in the communication itself in the prescribed format. Neither the reasons nor the statement in the prescribed format is to be found in the order passed under section 263 of the Act, spelling out the particular category of exception that prevented allotting the DIN on that day. It is yet another violation. We are of the considered opinion that for want of generation/quoting the DIN in the order dated 23/03/2020, such an order shall be treated to have never been issued and, therefore, shall not take any affect. Assessee appeal allowed.
Issues:
The legal existence of the order dated 23/03/2020 without Document Identification Number (DIN) challenged. Validity of the order under section 263 of the Act questioned based on Circular No. 19/2019 and the decision of Hon'ble Delhi High Court in CIT vs. Brandix Mauritius Holdings Ltd. Summary: The appeal was filed by the assessee against the order passed by the Principal Commissioner of Income Tax-Guntur under section 263 of the Income Tax Act, 1961 for the assessment year 2015-16. The issue revolved around the legal validity of the order dated 23/03/2020 without a Document Identification Number (DIN) as per Circular No. 19/2019 and the decision of the Hon'ble Delhi High Court in CIT vs. Brandix Mauritius Holdings Ltd. The order was found to be erroneous and prejudicial to the interest of Revenue, leading to a direction for reassessment by the Assessing Officer. The assessee contended that the order should be deemed 'nonest' due to the absence of a proper DIN, citing the Circular and the Delhi High Court decision. On the other hand, the Revenue argued that the order was legally valid despite the DIN discrepancy. The subsequent communication revealed the DIN number, but the question remained whether it validated the original order. The CBDT Circular No. 19/2019 mandated the use of computer-generated DIN in communications from 01/10/2019 onwards. Any communication without DIN was deemed invalid unless falling under exceptional circumstances outlined in the Circular. The Hon'ble Delhi High Court emphasized the binding nature of CBDT circulars on Revenue administration. The Tribunal found that the order dated 23/03/2020 lacked proper DIN and failed to cite reasons for its absence, violating the Circular. As per the Circular, any communication not conforming to the DIN requirement was considered invalid. Therefore, the Tribunal concluded that the order without a DIN should be treated as never issued, rendering it ineffective. In light of the above, the appeal of the assessee was allowed, and the order dated 23/03/2020 was deemed invalid. The Tribunal did not delve into the merits of the case due to this finding.
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