2025 (3) TMI 879 - HC - Income Tax

Validity of Assessment Order as barred by limitation - HELD THAT - Question of limitation involves mixed question of facts and law. As such summarily considering the same only on affidavits may not be appropriate in the background of the facts and circumstances of the case.See Charminar Cooperative Urban Bank Ltd. 2003 (8) TMI 551 - SUPREME COURT and TOPLINE SHOES LIMITED 2022 (7) TMI 1584 - SUPREME COURT DIN being absent in the assessment order which has rendered the order bad-in-law - To that effect a series of judgments have been placed by the learned advocate appearing for the petitioner however the issue is too technical and the judgment delivered in Tata Medical Center Trust 2023 (9) TMI 1324 - CALCUTTA HIGH COURT has been interfered by the Hon ble Supreme Court and there has been stay of the order wherein the proceedings were quashed by the High Court because of absence of DIN. Needless to state that in Tata Medical Center Trust 2023 (9) TMI 1324 - CALCUTTA HIGH COURT the order was passed by the appellate authority and the Hon ble High Court exercised its power under Section 260A of the Income Tax Act and not under Article 226 of the Constitution of India vested in the High Court. As alternative and efficacious remedy is available whether the High Court should exercise its jurisdiction under Article 226 of the Constitution of India - Needless to say that very recently in Bank of Baroda v/s Farooq Ali Khan 2025 (2) TMI 1021 - SUPREME COURT it has been observed that the statutory Tribunals are constituted to adjudicate and determine certain questions of law and fact the High Court should not substitute themselves as the decision-making authority while exercising their powers of judicial review. Having considered that the petitioner has directly approached the jurisdiction of this Court under Article 226 of the Constitution of India and called upon this Court to adjudicate issues relating to facts and the application of law on the said set of facts it is of the opinion that the present writ petition is not maintainable as an alternative and efficacious remedy is available to the petitioner.

Summary

1. ISSUES PRESENTED and CONSIDERED

The primary issues considered by the Court in this judgment include:

a) Whether the absence of a Document Identification Number (DIN) in the Assessment Order dated August 12, 2022, renders it invalid in light of the CBDT Circular No. 19/2019.

b) Whether the Assessment Order is barred by limitation, given the timeline for assessment under the Income Tax Act and the extensions provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).

c) Whether the assessment order is invalid due to non-compliance with the mandatory procedure under Section 144C of the Income Tax Act.

d) Whether the High Court should exercise its jurisdiction under Article 226 of the Constitution when an alternative remedy is available under the Income Tax Act.

2. ISSUE-WISE DETAILED ANALYSIS

a) Absence of Document Identification Number (DIN)

- Relevant legal framework and precedents: The CBDT Circular No. 19/2019 mandates the generation and quoting of DIN in all notices, orders, summons, letters, and other correspondence issued by the Income Tax Department. The petitioner cited several cases, including PCIT vs. Tata Medical Centre Trust, to argue that the absence of DIN renders the order invalid.

- Court's interpretation and reasoning: The Court acknowledged the petitioner's argument but noted that the judgment in PCIT vs. Tata Medical Centre Trust had been stayed by the Supreme Court. The issue of DIN was deemed too technical, and the absence of DIN was considered an irregularity rather than an illegality.

- Conclusions: The Court did not find the absence of DIN sufficient to invalidate the assessment order.

b) Limitation of the Assessment Order

- Relevant legal framework and precedents: Section 153 of the Income Tax Act specifies the time limits for making an assessment order. The petitioner argued that the order was barred by limitation as it was uploaded on January 23, 2023, beyond the extended deadline of September 30, 2022.

- Court's interpretation and reasoning: The Court considered the extensions provided by TOLA and the Supreme Court's directions during the COVID-19 pandemic, which extended the limitation period. The Court noted that the order was passed within the extended time frame and that the technical glitch in uploading did not affect its validity.

- Conclusions: The Court concluded that the assessment order was not barred by limitation.

c) Compliance with Section 144C

- Relevant legal framework and precedents: Section 144C of the Income Tax Act outlines the procedure for issuing a draft assessment order to eligible assessees. The petitioner argued that the order was final and not a draft, violating the procedure.

- Court's interpretation and reasoning: The Court did not specifically address this issue in detail but implied that the procedural requirements were not sufficiently violated to render the order invalid.

- Conclusions: The Court did not find sufficient grounds to invalidate the order on this basis.

d) Exercise of Jurisdiction under Article 226

- Relevant legal framework and precedents: The Court considered the principle that writ petitions should not be entertained when an effective alternative remedy is available, as established in several Supreme Court judgments.

- Court's interpretation and reasoning: The Court emphasized the availability of alternative remedies under the Income Tax Act and noted that the issues involved mixed questions of fact and law, which are better suited for statutory forums.

- Conclusions: The Court declined to exercise its jurisdiction under Article 226, emphasizing the availability of alternative remedies.

3. SIGNIFICANT HOLDINGS

- The Court held that the absence of a DIN in the assessment order was an irregularity, not an illegality, and did not invalidate the order.

- The Court concluded that the assessment order was not barred by limitation, considering the extensions provided by TOLA and the Supreme Court's directions during the COVID-19 pandemic.

- The Court emphasized the importance of exhausting alternative remedies before invoking the High Court's jurisdiction under Article 226, particularly in tax matters.

- The writ petition was dismissed, and the Court declined to stay the operation of its order, as no interim order had been in place from the inception.