2023 (10) TMI 1412 - AT - Income Tax

Validity of Revision order passed without quoting DIN - HELD THAT - Neither the order u/s 143(2) of the Act nor the communication dated 30/12/2019 spell out the reasons for not either generating the DIN or quoting the same in the order dated 20/12/2019. 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 143(3) r.w.s. 263 of the Act, spelling out the particular category of exception that prevented allotting the DIN on that day. It is yet another violation. In the case of CIT vs. Brandix Mauritius Holdings Ltd. 2023 (4) TMI 579 - DELHI HIGH COURT addressed this issue where the Revenue pleaded that is only a mistake, and held that to such case circular No. 19/2019, dated 14/08/2019 would apply. As referred to by us, paragraph 4 of the circular clearly reads that any communication which is not in conformity with paragraph 2 and paragraph 3 shall be treated as invalid and shall be deemed to have never been issued. It is, therefore, clear that any reason what-so-ever other than the exceptions mentioned in paragraph 3 would save the communication issued without DIN. We are of the considered opinion that for want of generation/quoting the DIN in the order dated 20/12/2019, such an order shall be treated to have never been issued and, therefore, shall not take any affect - Appeal of Revenue is dismissed.

Summary

Issues:
1. Legal existence of the order dated 20/12/2019 passed under section 143(3) read with section 263 of the Income Tax Act, 1961 without the Document Identification Number (DIN).
2. Permissibility of raising an additional ground in an appeal filed by the Revenue without resorting to cross appeal/objections or a petition under Rule 27 of ITAT Rules.

Issue 1:
The judgment revolves around the challenge to the legal existence of an order passed without the Document Identification Number (DIN) under the Income Tax Act. The assessee contended that the order was invalid due to the absence of DIN, citing Circular No. 19/2019 and a Delhi High Court decision. The Revenue argued that the order was within the limitation period and the absence of DIN did not invalidate it. The Tribunal analyzed the Circular, emphasizing the mandatory nature of DIN post-01/10/2019. The judgment referenced the Brandix Mauritius Holdings Ltd. case, where the High Court held that orders without DIN have no legal standing. It was concluded that the order without DIN was invalid, following the Circular's strict provisions, and was deemed to have never been issued.

Issue 2:
The second issue involved the permissibility of raising an additional ground in an appeal filed by the Revenue without following the prescribed procedures. The assessee argued that such a course was permissible, citing a Bombay High Court case. The Tribunal referred to ITAT Rules and a Punjab & Haryana High Court case, highlighting the allowance for new grounds if they do not require further investigation into facts. It was established that the assessee could raise additional grounds in the appeal filed by the Revenue, as long as the opposing party had the opportunity to be heard. The judgment emphasized the importance of furthering justice and concluded that the assessee's additional ground could be considered in the appeal.

In conclusion, the judgment dismissed the Revenue's appeal, declaring the order without DIN as invalid and emphasizing the importance of adhering to procedural requirements and ensuring fairness in legal proceedings.