2023 (7) TMI 1444 - AT - Income Tax

Validity of assessment order without bearing DIN - Addition u/s 69A - cash deposited in bank account - HELD THAT - As in the present appeal we note that, the assessment order bears no DIN in the body thereof, thus the assessment order undisputedly was communicated in violation of Para-2 of CBDT Circular No. 19/2019 dt. 14/08/2019). Revenue also failed to bring on record any evidence effectively showcasing that the case of the assessee falls within any of the five exceptional circumstances envisaged in Para-3 and accompanying therewith further evidentiary documents in establishing regularisation of earlier manual issuance of communication in terms Para-5 thereof. Thus, communication of assessment order suffered from compliance and rendered itself invalid as if it has never been issued to the assessee. Thus, in our considered view, for want of generating quoting the DIN in the body, the assessment order is to be treated as never been issued, therefore ceases to have any effect in the eyes of law. Aseesee appeal allowed.

Summary

Issues:
1. Addition under section 69A of the Income Tax Act, 1961.
2. Validity of assessment order based on Circular No. 19/2019 issued by the Central Board of Direct Taxes (CBDT) regarding Document Identification Number (DIN) compliance.

Analysis:

Issue 1: Addition under section 69A of the Income Tax Act, 1961
The appeal pertains to the assessment year 2012-13 where the assessee contested the addition of a specific amount under section 69A of the Income Tax Act, 1961. The assessee argued that being an agriculturist with substantial land holdings and no other significant activities besides agriculture, the addition was unwarranted. The dispute revolved around the interpretation and application of section 69A. The Tribunal considered the arguments presented by both the assessee and the Revenue, along with relevant case laws and factual circumstances. Ultimately, the Tribunal found in favor of the assessee, allowing the appeal and directing the deletion of the addition under section 69A.

Issue 2: Validity of assessment order based on CBDT Circular No. 19/2019
During the proceedings, a legal ground challenging the validity of the assessment order based on Circular No. 19/2019 issued by the CBDT was raised for the first time before the Tribunal. The Circular mandated the generation, allotment, and communication of Document Identification Numbers (DIN) for various official communications. The Tribunal deliberated on the admissibility of this legal ground, considering precedents set by higher courts regarding the admission of new legal grounds at the appellate stage. The Tribunal admitted the legal ground for consideration, highlighting that no new facts needed verification, and the omission to raise it earlier was not unreasonable. The Tribunal then analyzed the compliance of the assessment order with the DIN requirement as per the CBDT Circular. It noted the absence of DIN in the assessment order, indicating non-compliance with the Circular's provisions. Additionally, the Revenue failed to demonstrate that the case fell within the exceptions allowing manual communication without DIN initially. Consequently, the Tribunal held that the assessment order was invalid due to non-compliance with the DIN requirement, rendering it as if it was never issued. As a result, the Tribunal allowed the appeal on this ground, emphasizing the importance of adhering to procedural requirements outlined in CBDT Circulars for effective communication and assessment procedures.

This detailed analysis covers the key issues addressed in the judgment, providing a thorough understanding of the Tribunal's decision and the legal principles applied in the case.