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2024 (7) TMI 565 - AT - Income TaxValidity of assessment orders without quoting DIN - HELD THAT - Assessment order(s) dated 31.12.2019 for AYs are not only without mention of DIN in the body of the order, there is no material on the record mentioning the reason for non-issuance of DIN. There is thus violation of the mandate enshrined in CBDT Circular No. 19/2019 dated 14.08.2019. Therefore, the consequence mentioned in para 4 of the said Circular, namely that the impugned assessment order(s) dated 31.12.2019 be treated as invalid and non-est in the eye of law should follow. We are in agreement with the above contentions of the assessee As respectfully following the decision of Brandix Mauritius Holdings Ltd. 2023 (4) TMI 579 - DELHI HIGH COURT as well as the binding CBDT Circular 19/2019, we are inclined to quash the assessment order(s) dated 31.12.2019 passed by the Ld. AO under section 254/153C/144 of the Act.
Issues Involved:
1. Non-compliance with Tribunal's directions by the Assessing Officer (AO). 2. Jurisdictional errors in framing the assessment orders. 3. Absence of incriminating material found during the search. 4. Disallowance of expenses claimed by the assessee. 5. Validity of assessment orders without Document Identification Number (DIN). 6. Legality of penalty orders under Section 271(1)(c) of the Income Tax Act, 1961. Detailed Analysis: 1. Non-compliance with Tribunal's Directions by the AO: The assessee argued that the AO did not follow the Tribunal's directions from the order dated 19-12-2018. The CIT(A) erred in not reversing the AO's action. The Tribunal acknowledged this issue but primarily focused on the legality of the assessment orders due to the absence of DIN. 2. Jurisdictional Errors in Framing the Assessment Orders: The assessee contended that the AO framed the assessment orders under Section 254/153C/144 without proper jurisdiction, requisite satisfaction, and compliance with mandatory conditions under the Income Tax Act. The Tribunal noted these jurisdictional issues but emphasized the invalidity of the assessment orders due to the absence of DIN. 3. Absence of Incriminating Material Found During the Search: The assessee claimed that no incriminating material was found during the search, making the assessment orders and disallowances invalid. The Tribunal did not delve deeply into this issue, as the absence of DIN rendered the assessment orders invalid. 4. Disallowance of Expenses Claimed by the Assessee: The assessee challenged the disallowance of Rs. 2,15,941/- as expenses, arguing that it was based on incorrect facts and findings and violated the principles of natural justice. The Tribunal did not address this issue on merits due to the overriding issue of DIN absence. 5. Validity of Assessment Orders Without DIN: The primary issue was the absence of DIN in the assessment orders dated 31.12.2019. The Tribunal noted that the assessment orders were accompanied by covering letters containing DIN, but the DIN was not mentioned in the body of the orders. The Tribunal referred to CBDT Circular No. 19/2019, which mandates that all communications must have a computer-generated DIN. The Tribunal cited several judicial precedents, including the Delhi High Court's decision in CIT (International Taxation) vs. Brandis Mauritius Holdings Ltd., which held that non-compliance with the DIN requirement renders the orders invalid and non-est. The Tribunal quashed the assessment orders for all assessment years involved. 6. Legality of Penalty Orders Under Section 271(1)(c): The assessee challenged the penalty orders under Section 271(1)(c) on several grounds, including lack of jurisdiction, absence of valid approval, and failure to record mandatory satisfaction. Since the Tribunal quashed the assessment orders, the penalty orders based on those assessments were rendered infructuous and were not adjudicated on merits. Conclusion: The Tribunal quashed the assessment orders dated 31.12.2019 due to the absence of DIN, rendering them invalid and non-est. Consequently, the penalty orders under Section 271(1)(c) were also deemed infructuous. All six quantum appeals and six penalty appeals for the assessment years 2007-08, 2008-09, 2009-10, 2010-11, 2012-13, and 2013-14 were allowed.
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