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TMI Blog2022 (11) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 to implement the DIN system and also in view of the larger interest and to bring transparency and accountability in the indirect tax administration also, has directed Union of India and GST council to issue advisory/instruction/recommendations regarding implementation of digital generation of DIN for all communications sent by SGST officers to taxpayers and further directed that concerned States to consider implementing system of e-generation of DIN - impugned order of the ld. PCIT is hereby quashed - Decided in favour of assessee. - I.T.A No.432/Kol/2020 - - - Dated:- 22-11-2022 - Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member For the Appellant : Shri Sunil Surana, FCA For the Respondent : Shri Amal Sudhir Kamat, CIT-DR ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 22.06.2020 of the Principal Commissioner of Income Tax-15, Kolkata (hereinafter referred to as the PCIT ) exercising his revision jurisdiction u/s 263 of the Income Tax Act (hereinafter referred to as the Act ). 2. The ld. AR of the assessee has contested the validity of the revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax administration. 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 or 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 and to maintain proper audit trail of all communication, the Board in exercise of power under section 119 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act ), has decided that no communication shall be issued by any income- tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry. investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the I st day of October, 2019 unless a computer-ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income-tax authorities shall identify such cases and shall upload the notices in these cases on the Systems by 31th October, 2019. 8. Hindi version to follow. (Sarita Kumari) Director (ITA.II), CBDT (F.No. 225/95/2019-ITA.II) 12. From the perusal of above circular, we note that CBDT came out with this circular to mitigate the issues/instances where certain notices, orders, summons, letters and other correspondences which have been issued manually do not have proper audit trail of their communication despite various e-governance initiatives and computerization of its work. Therefore, in order to prevent such instances and to maintain proper audit trail of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the exception pointed out by the Ld. CIT, DR does not apply in the present case since it is relevant only to a communication which is issued electronically. He further pointed out that within this para 3 of the CBDT Circular, it is mentioned that when the communication is issued manually, such communication in its body must state the fact that the said communication is issued manually without a DIN and the date of obtaining of the written approval of the prescribed authority for issue of manual communication in the prescribed format has to be stated therein. In the present case, no such fact of issuing the present order manually without a DIN by obtaining an approval from prescribed authority in the prescribed format is mentioned/quoted in the body of the impugned order and, therefore, even if the case records are verified, it will not serve any purpose since the impugned order itself does not contain any such factual notation as contemplated in para 3 of the CBDT circular. 12.3 In order to demonstrate how a communication issued electronically containing a DIN would look like, the Ld. Counsel referred to one such notice u/s. 154 dated 08.10.2020 issued on the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of relaxation of any of the provisions of the sections specified there or otherwise. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted 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 Supreme Court and the jurisdictional High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. It is submitted that as such the same is the Government s objective. It is submitted that the same may prevent any abuse by the Departmental Officers of pre-dating communications and ratifying actions by authorizations subsequently made out in the files. 2.1 It is the case on behalf of the petitioner that even Hon ble the Prime Minister of India had earlier asked the Department of Revenue to come up with specific measures to ensure that the honest taxpayers are not harassed and served better. It is submitted that in pursuance of the directions issued by the Hon ble Prime Minister, the Central Government had taken a decision as far as back in the year 2019 to implement the DIN system of Central Board of Direct Taxes (CBDT). It is submitted that as per the press note issued by the Ministry of Finance on and from 01.10.2019, every CBDT communication will have to have a Document Identification Number (DIN). 2.2 It is averred that the Document Identification Number system, which will bring in transparency and accountability in the tax administration and, as on today, the same has been implemented only by two States, i.e., the States of Karnataka and Kerala. It is submitted by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution of India, the petitioner has prayed for the following reliefs:- a. Issue a writ of mandamus or any other appropriate writ, order or direction to the respondents to take all necessary steps to implement a system for electronic (digital) generation of a Document Identification Number (DIN) for all communications sent by the state tax officers to taxpayers and other concerned persons; b. Issue a writ of mandamus or any other appropriate writ, order or direction to the GST Council to consider and take a policy decision in respect of implementation of DIN system by all the states; c. Issue a writ of mandamus or any other appropriate writ, order or direction to the Central Government/CBIC to introduce centralised DIN for the entire country; d. pass such further order(s) as may be deemed fit and proper in facts and circumstances of the present case, in the interest of justice. 6. It cannot be disputed that implementing the system for electronic (digital) generation of a Document Identification Number (DIN) for all communications sent by the State Tax Officers to taxpayers and other concerned persons would be in the larger public interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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