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TMI Blog2022 (12) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from ITO(Inv) Unit 3(1) with regard to the search conducted and the undisclosed income offered by the assessee during the course of search. Based on the statement recorded from the employees of the assessee, Shri Shivaramu, the AO made an addition of Rs.2,70,00,000 in the hands of the assessee towards deposits made into the account of Shri Shivaramu and his brother by the assessee and completed the assessment u/s.147 r.w.s.144 of the Act. 3. Subsequently the PCIT issued a show cause notice for the reason that in the statement recorded Shri Shivaramu had stated about the cash withdrawals to the tune of Rs.17 crores in a span of 15 days by the assessee and the AO while completing the assessment did not make any enquiries in this regard. The assessee submitted before the PCIT giving reasons for the cash withdrawals and that the AO has applied his mind while completing the assessment after taking into account the details furnished by the assessee before the AO. However the PCIT did not accept the submissions of the assessee and proceeded to set aside the order of the AO passed u/s.147 r.w.s. 144 for doing fresh assessment on the point of payments of Rs.17 crores. Aggrieved the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e followed when a manual order is issued under exceptional circumstances. The ld. AR argued that the assessee is not aware for the exceptional circumstances under which the manual order is issued and whether the procedure as laid down in para 3 have been complied with since there is no mention of the same in the order issued u/s.263 which is one of the requirements as per para 3 of the circular. It is the submission of the ld. AR therefore that as per para 4 of the Circular, any communication which is not in conformity with para 2 & 3 of the said Circular shall be treated as invalid. The ld. AR prayed that the order u/s. 263 be quashed on this legal ground. In this regard, the ld AR relied on the decision of the coordinate bench in the case of Dilip Kothari v. CCIT, ITA No.403 to 405/Bang/2022 dated 31.10.2022. 8. The ld. DR submitted that the order u/s. 263 is dated 15.3.2021 and the intimation with the DIN number with the same date i.e.15.3.2021 was sent along with the order u/s. 263. The ld. DR therefore submitted that the DIN is very much part of the order u/s. 263 and therefore the argument of the ld. AR on the validity of the order u/s. 263 does not have merit. The ld DR als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en allotted and is duly quoted in the body of such communication. 3. In exceptional circumstances such as, - (i) when there are technical difficulties in generating / allotting / quoting the DIN and issuance of communication electronically; or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties: or (iii) when due to delay in PAN migration. PAN is lying with non-jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated; or (v) When the functionality to issue communication is not available in the system, the communication may be issued manually but only after recording reasons in writing in the file and with prior written approval of the Chief Commissioner/Director General of incometax. In cases where manual communication is required to be issued due to delay in PAN migration, the proposal seeking approval for issuance of manual communication shall include the reason for delay in PAN migr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circular states that the communication issued manually not in conformity with Para-2 and Para-3 of the circular, shall be treated as invalid and shall be deemed to have never been issued. 15. We also notice that the Kolkata Bench of the ITAT in the case of Tata Medical Centre Trust (supra) has considered a similar issue and held that - "13. From the above submissions and arguments, we note that it is an undisputed fact that the impugned order u/s. 263 of the Act has been issued manually which does not bear the signature of the authority passing the order. Further, from the perusal of the entire order, in its body, there is no reference to the fact of this order issued manually without a DIN for which the written approval of Chief Commissioner/Director General of Income-tax was required to be obtained in the prescribed format in terms of the CBDT circular. We also note that in terms of para 4 of the CBDT circular, such a lapse renders this impugned order as invalid and deemed to have never been issued. 13.1 It is also important to note about the binding nature of CBDT circular on the Income-tax Authorities for which gainful guidance is taken from the decision of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard of Direct Taxes is binding on administrative officer in view of the statutory provision contained in section 143(2), which provides for limitation of 12 months for issuance of notice under section 143(2). While giving its finding, the Hon'ble High Court of Chhattisgarh placed reliance on the decisions in the case of UCO Bank (supra) and Nayana P. Dedhia (supra). 13.5 Hon'ble jurisdictional High Court of Calcutta in the case of Amal Kumar Ghosh v. Asstt. CIT [2014] 45 taxmann.com 482/225 Taxman 229 (Mag.)/361 ITR 458 dealt with the issue relating to CBDT circular which according to the Department cannot defeat the provisions of law. While giving its observations and finding on the issue, the Hon'ble Court referred to the decision of Hon'ble Chhattisgarh High Court in the case of Sunita Finlease Ltd. (supra), which are as under: 7. We have considered the rival submissions advanced by the learned Advocates. Even assuming that the intention of CBDT was to restrict the time for selection of the cases for scrutiny within a period of three months, it cannot be said that the selection in this case was made within the aforesaid period. Admittedly, the return was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar view is being taken by the Delhi Bench of the ITAT in the case M/s.Brandix Mauritius Holdings Ltd., vs DCIT (ITA No.1542/Del/2020 dated 19.09.2022) 17. In assessee's case there is no dispute about the fact that the impugned order u/s. 263 of the Act has been issued manually. It is also noticed that the DIN for the order is generated through two separate intimations one bearing the same date as the date of the order u/s.263 and the other is dated 25.03.2022. The argument of the ld DR that the intimation dated 24.03.2022 is part of the order and that there is no violation cannot be accepted as generating the DIN by separate intimation is allowed to be done to regularise the manual order (Para 5 of the circular) provided the manual order is issued in accordance with the procedure as contained in Para 3. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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