2023 (11) TMI 645 - AT - Income Tax

Validity of orders passed by AO without quoting DIN - Introduction of additional ground based on CBDT Circular dated 14.8.2019 - HELD THAT - We find that it is a question of law which is based on the material which is already on record and, therefore, the introduction of the additional ground deserves to be allowed. A useful reference in this regard can be made to the decision of the Hon ble Supreme Court in NTPC vs. CIT 1996 (12) TMI 7 - SUPREME COURT in which the Hon ble Supreme Court has inter alia held that the view that the Tribunal is confined only to issues arising out of the appeal before the CIT(A) is too narrow a view of the powers of the Appellate Tribunal. It has been held that Tribunal will have a discretion to allow or not to allow new ground to be raised. However, where the Tribunal is only required to consider a question of law arising from the facts which are on record, in the assessment proceedings, there is no reason, why such a question should not be allowed to be raised - we allow the introduction of additional ground as prayed. Manadation to quote DIN - On merits it is a matter of record that the order of the Assessing Officer does not bear any DIN. CBDT vide aforesaid Circular dated 14.8.2019 has mandated, Generation/ Allotment/ Quoting of computer generated Document Identification Number (DIN) in the body of all communications, in the nature of notices/summons/ letters/ correspondences as well as the orders passed. All that the communication states is about the provision of facility for generation of Intimation Letter containing Document Identification Number / Document Number (DIN/DN) for documents issued outside ITBA system but uploaded manually in Income Tax Business Application (ITBA). From para 4 of the communication, it is clear that it pertains to the functionality to capture and uphold the letters, notices and orders issued manually and served on taxpayers by users due to any exceptional circumstances under Para 3 (i), (ii) and (iii) of the aforesaid Circular dated 14.8.2019. It is not the case made out that there are any exceptional reasons recorded in these appeals as required by the Circular dated 14.8.2019. Thus, in our opinion, the said communication cannot come to the aid of the Revenue in the present Appeals. The issue is no longer res integra, as it is covered by several decisions of the coordinate Bench and in particular the decision in the case of M/s Brandix Mauritius Holdings Ltd. 2022 (11) TMI 34 - ITAT DELHI which has been confirmed by the Hon ble Delhi Court in the case of CIT (International Taxation-1), New Delhi vs. M/s Brandix Mauritius Holdings Ltd. 2023 (4) TMI 579 - DELHI HIGH COURT

Summary

Issues involved:
The judgment involves the issue of non-compliance with CBDT Circular No. 19/2019 dated 14.08.2019 in relation to assessment orders passed under section 153C of the Income Tax Act, 1961.

Summary:

Issue 1: Compliance with CBDT Circular No. 19/2019
The appeals revolved around the non-compliance with the CBDT Circular No. 19/2019 dated 14.08.2019, specifically regarding the generation/allotment/quoting of a computer-generated Document Identification Number (DIN) in communications and orders. The introduction of an additional ground based on this circular was allowed, citing the discretion of the Tribunal to consider questions of law arising from facts on record, as per the decision in NTPC vs. CIT (1998) 229 ITR 383 (SC).

Issue 2: Validity of Assessment Orders
The assessment orders under section 153C r.w.s. 143(3) of the Income Tax Act were challenged on the grounds of non-compliance with the CBDT Circular. The Tribunal found that the orders did not bear a DIN as required by the circular. Citing similar decisions from the Bombay and Kolkata High Courts, the Tribunal emphasized the importance of quoting the DIN in communications and orders to ensure validity.

Issue 3: Revenue's Argument
The Revenue relied on a communication regarding the provision of a facility for generating Intimation Letters containing DIN for documents issued manually outside the system. However, the Tribunal found that this communication did not support the Revenue's position, as it did not address the exceptional circumstances required by the CBDT Circular for manual issuance of communications.

Conclusion:
Considering the non-compliance with the CBDT Circular No. 19/2019, the Tribunal allowed the additional ground raised by the Assessees and set aside the assessment orders in favor of the Assessees. The Appeals of the Assessees were allowed, and the assessment orders were consequently annulled.