2023 (8) TMI 96 - HC - Income Tax

Assessment Order communicated without quoting DIN - CBDT has permitted that in exceptional circumstances, communication may be issued manually but only after recording reasons in writing and with the prior written approval of the Chief Commissioner/ Director General of Income Tax concerned - HELD THAT - Assessment Order was passed manually due to the technical difficulty that was being faced on the Income Tax Business Application (ITBA) system and that the approval was accorded by the Chief Commissioner of Income Tax. He does not explain why the endorsement as per the format provided in Circular No. 19 of 2019 is not made in the Assessment order. He does not explain why the date of the alleged approval obtained is also not mentioned therein. He has also not enclosed the directions passed on which the letter dated 31st March 2023 was issued by the Office of the Chief Commissioner of Income Tax. Therefore, in our view, since the Assessment Order does not contain the DIN and the AO having been issued without complying with the conditions laid down in the Circular No. 19 of 2019, we hereby quash and set aside the Assessment Order dated 31st March 2023 and the consequent demand notices etc. issued. We remand matter to the J. A. O. for de-novo consideration and the Assessment shall be completed and order to be passed by 30th September 2023. Petitioner shall by 5th August 2023 address a communication to the J.A.O. mentioning therein the documents, copies whereof are required for Petitioner to submit its further objections and these documents shall be provided by 11th August 2023. By 31st August 2023, Petitioner shall submit further submissions to effectively deal with all documents. The final Assessment Order shall be passed after giving a personal hearing to Petitioner, notice whereof shall be communicated atleast five working days in advance.

Summary

Issues involved:
The impugning of an Assessment Order for Assessment year 2020-2021 based on the absence of a Document Identification Number (DIN) generated in the Assessment Year.

Details of the Judgment:
The petitioner challenged the Assessment Order on various grounds, one being the absence of a DIN as per Circular No. 19 of 2019. The Circular mandated that all communications after 1st October 2019 must have a computer-generated DIN. Manual communication was allowed only in exceptional circumstances with written approval from the Chief Commissioner. The Assessment Order in question was issued manually, claiming approval from the Chief Commissioner, but failed to mention the date of approval or provide the actual approval. The format specified in the Circular was also missing. Consequently, the Court deemed the Assessment Order invalid and set it aside.

The Officer responsible for the Assessment Order cited technical difficulties for manual processing and claimed approval from the Chief Commissioner. However, the Officer did not adhere to the Circular's requirements, as the DIN was missing, and proper documentation and endorsements were not provided. The Court found the explanations unsatisfactory and decided to quash the Assessment Order, along with any related demand notices. The matter was remanded for re-assessment, with a deadline for completion set for 30th September 2023.

The petitioner was instructed to communicate document requirements by 5th August 2023, with submissions due by 31st August 2023. A personal hearing was mandated before the final Assessment Order, with advance notice. Additionally, any reliance on judgments or orders had to be disclosed, and all submissions of the petitioner had to be addressed in the final Assessment Order. The Court clarified that no observations were made on the merits of the case.

The petition was disposed of with no costs awarded, emphasizing the importance of compliance with procedural requirements and guidelines in tax assessments.