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2024 (2) TMI 36 - AT - Income TaxValidity of assessment orders without quoting DIN - validity of subsequent generation of the DIN - HELD THAT - As findings of the Ld. CIT(A) are of no consequence as the mandate of the said CBDT Circular is that DIN should be mentioned in the body of the assessment order and the reason for non-issuance of DIN thereof if the order is passed manually. It must also mention the date and number of the written approval of the Chief Commissioner / Director General of Income Tax. The fact remains that the assessment order does not contain the DIN and any reason for non-issuance of DIN. The DIN has to be generated prior to the assessment order being uploaded on the ITBA Systems as per the Instructions from Directorate of Income Tax (System) dated 25.10.2019. Subsequent generation of DIN and uploading of the same on ITBA will not, in our view, validate this deficiency. See Brandix Mauritious Holdings Ltd 2023 (4) TMI 579 - DELHI HIGH COURT The case of the assessee also finds support by the subsequent decisions of the Hon ble Calcutta High Court in the case of M/s. Tata Medical Centre Trust 2023 (9) TMI 1324 - CALCUTTA HIGH COURT and Hon ble Bombay High Court in the case of Ashok Commercial Enterprises 2023 (9) TMI 335 - BOMBAY HIGH COURT wherein the Hon ble Bombay High Court, inter-alia held that subsequent generation of the DIN will not be sufficient as the requirement of the CBDT Circular, is quoting of the DIN, in the body of such communication and / or order. Thus we are inclined to quash the assessment order passed by the AO under section 143(3) of the Act.
Issues Involved:
1. Deletion of addition due to unexplained cash deposit. 2. Comparison of cash deposits and sales ratios. 3. Disproportionate increase in cash on hand. 4. Alleged manipulation of cash sales figures. 5. Legal sanctity and jurisdiction of the assessment order without DIN. Summary: Issue 1: Deletion of Addition Due to Unexplained Cash Deposit The Revenue questioned the Ld. CIT(A)'s deletion of Rs. 2,50,00,000/- added by AO based on unexplained cash deposits in the assessee's bank account. The assessee failed to provide a satisfactory explanation during the assessment proceedings. Issue 2: Comparison of Cash Deposits and Sales Ratios The Revenue contended that the Ld. CIT(A) erred by comparing only the ratio of cash deposited to cash sales for FY 2015-16 and FY 2016-17, ignoring abrupt changes in cash sales and deposits in FY 2016-17 compared to FY 2015-16. Issue 3: Disproportionate Increase in Cash on Hand The Revenue highlighted that the average cash in hand increased disproportionately from Rs. 25 Lakhs last year to Rs. 3.20 Crores as of 08.11.2019, which the Ld. CIT(A) allegedly ignored. Issue 4: Alleged Manipulation of Cash Sales Figures The Revenue claimed that the Ld. CIT(A) overlooked the abnormal increase in cash sales during October 2016 and potential manipulation of cash sales figures, as VAT returns for October 2016 were not filed until demonetization was announced. Issue 5: Legal Sanctity and Jurisdiction of the Assessment Order Without DIN The assessee challenged the assessment order's legal sanctity due to the absence of a Document Identification Number (DIN), arguing it was void ab initio and violated the e-assessment scheme. The Tribunal agreed with the assessee, noting the absence of DIN in the assessment order and non-compliance with CBDT Circular No. 19/2019. The Tribunal found no evidence supporting the Revenue's claim that the assessment order was uploaded with a DIN within the prescribed time limit. Consequently, the Tribunal quashed the assessment order, deeming it invalid and non-est in law, following the binding CBDT Circular and judicial precedents. Conclusion: The Tribunal quashed the assessment order dated 31.12.2019 for AY 2017-18 due to the absence of DIN, rendering the issues in the Revenue's appeal academic. The appeal of the Revenue was dismissed, and the cross-objection of the assessee was allowed.
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