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TMI Blog2022 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... provided the manual order is issued in accordance with the procedure as contained - On perusal of the order u/s.263, it is noted that the order neither contains the DIN in the body of the order, nor contains the fact in the specific format as stated in Para 3 that the communication is issued manually without a DIN after obtaining the necessary approvals. Therefore, we are of considered view that the impugned order is not in conformity with Para 2 and Para 3 of the CBDT circular. As we hold that the orders passed u/s.263 for the assessment years 2014-15 to 2016-17 are invalid and shall be deemed to have never been issued as per Para 4 of the CBDT circular as the order is not conformity with Para 2 and Para 3. It is ordered accordingly. - SHRI GEORGE GEORGE K. , JUDICIAL MEMBER AND Ms. PADMAVATHY S , ACCOUNTANT MEMBER Appellant by : Shri Narendra Kumar Jain , Advocate Respondent by : Shri K. Sankar Ganesh , Jt. CIT(DR)(ITAT), Bengaluru. ORDER Per Padmavathy S. , Accountant Member These appeals by the assessee are against the separate orders of the Principal Commissioner of Income Tax (Central), Bengaluru [PCIT] u/s. 263 of the Income-tax Act, 1961 [t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained cash investments made by the assessee during the FY 2013-14. The assessee is in appeal before the Tribunal against the order of the PCIT. 6. The assessee has raised common grounds in all these appeals as follows:- 1. The learned Principle Commissioner of Income Tax (Central), Bangalore (hereinafter referred as PCIT for brevity) has erred in passing the Order in the manner passed by him. The Order being bad in law, is liable to be quashed. 2. The learned PCIT has erred in initiating revisionary proceedings u/s 263 without appreciating that the assessment order is not erroneous and all the documents were available on the record of the Assessing Officer; 3. The learned PCIT has erred in initiating revisionary proceedings u/s 263; (i) Merely by placing reliance on the statement of Mr.Pramod Bhandari without appreciating that same was retracted via affidavit and therefore very basis on which proceedings were initiated does not survive; (ii) On the basis of some loose sheets without appreciating that it is not an admissible evidence; and (iii) By relying on the statement of Mr.Harish Davanam without providing. a copy of said statement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.3 Accordingly, the learned PCIT partly set aside the assessment order and directed the Assessing Officer to pass a fresh assessment order after considering the above. The Appellant filed an appeal before the Hon'ble Tribunal against the order u/s 263 on 20.05.2022. 1.4 The Appellant submits that, the impugned order passed u/s. 263 of the Act does not contain any Document Identification No. (DIN) nor any reason for non issuance of DIN along with the impugned order. The Appellant submits that the order is without any DIN, which is in violation of the very basic object of CBDT Circular No.19/2019 dated 14.08.2019. 1.5 The whole objective of the said CBDT Circular requiring a mandatory quoting of DIN on all the communications of the department is to maintain the audit trail. which otherwise gets lost. At para 4, CBDT circular states that any order without a DIN is invalid or deemed to have never been issued . 1.6 Para 3 of the said circular provides for certain exceptional circumstances when the communication is issued manually, in which case such manually issued communications should contain the fact that the said communication is issued manually without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt therefore humbly prays that the additional grounds be admitted and adjudicated along with the other grounds of appeal in the course of hearing of the appeal. 8. We have heard both the parties on the admission of additional grounds and following the Hon ble Supreme Court judgment in the case of M/s National Thermal Power Co. Ltd. Vs. CIT, 229 ITR 383 (SC), the additional grounds are admitted for adjudication. 9. During the course of hearing the ld AR presented arguments both on legal grounds and on merits. It was submitted by the ld AR that if the grounds on the legal issue is adjudicated then the grounds on merits would become academic. We will therefore first proceed to adjudicate the legal grounds in the following paragraphs. 10. The ld. AR submitted that the order passed u/s. 263 is in violation of the CBDT Circular No.19 of 2019 dated 14.8.2019. The ld. AR submitted that the order u/s. 263 is a manual order without any DIN mentioned therein. The PCIT has given two intimations dated 24.3.2022 and 25.3.2022 wherein two different DINs have been given for the said manual 263 order. The ld. AR drew our attention to paragraph 3 of the above mentioned Circular wherein t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 14.08.2019 which is reproduced below CIRCULAR NO. 19/ 2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th August, 2019. Subject: Generation/Allotment/Quoting of Document Identification Number in Notice/Order/Summons/letter/ correspondence issued by the Income Tax Department reg. With the launch of various e-governance initiatives, Incometax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the taxadministration. Presently, almost all notices and orders are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as communication ) were found to have been issued manually, without maintaining a proper audit trail of such communication. 2. In order to prevent such instances an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax vide number .... dated .... 4. Any communication which is not in conformity with Para-2 and Para-3 above, shall be treated as invalid and shall be deemed to have never been issued. 5. The communication issued manually in the three situations specified in para 3- (i), (ii) or (iii) above shall have to be regularised within 15 working days of its issuance, by - i. uploading the manual communication on the System. ii. compulsorily generating the DIN on the System; iii. communicating the DIN so generated to the assessee/any other person as per electronically generated pro-forma available on the System. 6. An intimation of issuance of manual communication for the reasons mentioned in para 3(v) shall be sent to the Principal Director General of Income-tax (Systems) within seven days from the date of its issuance. 7. Further, in all pending assessment proceedings, where notices were issued manually, prior to issuance of this Circular, the Incometax authorities shall identify such cases and shall upload the notices in these cases on the Systems by 31th October, 2019. Sd/- (Sarita Kumari) Director (ITA.II)CBDT. 14. Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under section 119 of the Income-tax Act, which are binding on the authorities in the administration of the Act. Under section 119(2)(a) , however, the circulars as contemplated therein cannot be adverse to the assessee. Thus, the authority which wields the power for its own advantage under the Act is given the right to forgo the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as laid down in section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. Hard cases which can be properly categorized as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities. 13.3 In the matter of CIT v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Mrs. Gutgutia, learned Advocate submitted that the circulars are not meant for the purpose of permitting the unscrupulous assessees from evading tax. Even assuming, that to be so, it cannot be said that the department, which is State, can be permitted to selectively apply the standards set by themselves for their own conduct. If this type of deviation is permitted, the consequences will be that floodgate of corruption will be opened which it is not desirable to encourage. When the department has set down a standard for itself, the department is bound by that standard and cannot act with discrimination. In case, it does that, the act of the department is bound to be struck down under article 14 of the Constitution. In the facts of the case, it is not necessary for us to decide whether the intention of CBDT was to restrict the period of issuance of notice from the date of filing the return laid down under section 143(2) of the I.T. Act. [emphasis supplied by us by underline] 14. Considering the facts on record, perusal of the impugned order, submissions made by the Ld. Counsel and the department, CBDT circular and the judicial precedents including that of Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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