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TMI Blog2023 (6) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... x for issuing manual communication. In the facts of the present appeal, admittedly, the assessment order issued manually by the Assessing Officer without generating DIN does not contain any reasons recorded by the Assessing Officer for issuing the order manually without DIN and the number date of the approval granted by the CCIT. Thus, there cannot be any manner of doubt that the Assessing Officer has issued the assessment order without complying with the conditions enshrined in paragraph No. 2 3 of CBDT Circular, referred to above. That being the factual position, in terms of paragraph No. 4 of the said Circular, the assessment order has to be declared as invalid and shall be deemed to have never been issued. As relying on case of CIT vs. Brandix Mauritius Holdings Ltd. [ 2023 (4) TMI 579 - DELHI HIGH COURT ] we have no hesitation in holding that the impugned assessment order is invalid and shall be deemed to have never been issued. Accordingly, we quash the impugned assessment order. Decided in favour of assessee. - ITA No. 1898/Del/2022 - - - Dated:- 30-5-2023 - SHRI G. S. PANNU , PRESIDENT AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER For the Assessee : Sh. Ved Jai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for issuing the assessment order manually without DIN and number date of approval granted by Chief Commissioner/Director General of Incometax for issuing the assessment order manually without DIN. Drawing our attention to Circular No. 19/2019 dated 14.08.2019, learned counsel submitted, as per paragraph 4 of the said Circular, any communication, which is not in conformity with the conditions prescribed in paragraph 2 and 3 of the Circular, shall be treated as invalid and shall be deemed to have never been issued. Thus, he submitted, the assessment order, having been issued without satisfying the conditions of paragraph 2 and paragraph 3 of the Circular, has to be treated as invalid. In support of such contention, learned counsel relied upon the following decisions : (i). M/s. Brandix Mauritius Holdings Ovs. V. DCIT, 2022(11)TMI 34 (ITAT Delhi). (ii). CIT v. Brandix Mauritius Holdings Ltd., 2023(4)TMI 579 (Delhi High Court) (iii). Dilip Kothari v. PCIT, 2022(11) TMI 33 (ITAT Bangalore) (iv). Sh. H.K. Suresh v. PCIT, 2022(12) TMI 744 (ITAT Bangalore) (vi). Tata Medical Centre Trust v. CIT, 2022(7) TMI 1334 (ITAT Kolkata) 6. Learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, 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 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 1SI day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been 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 communicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 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 31st October, 2019. 8. Hindi version to follow. Sd/- (Sarita Kumari) Director (ITA, II) CBDT (F.No. 225/95/2019-1TA.H) Copy lo:- i. PS to FM/OSD to FM/PS to MoS(F)/OSD to MoS(F) ii. PS to Secretary (Revenue) iii. Chairman, CBDT All Members. CBDT iv. All Pr.CCslT/Pr.DsGIT v. All Joint Secretaries/CslT, CBDT vi. C AG vii. CIT (M TP), Official Spokesperson of CBDT viii. O/o Pr. DGIT(Systems) for uploading on official website ix. Addl.CIT (Database Cell) for uploading on the departmental website Sd/- (Sarita Kumari) Director (ITA, II) CBDT 10. A reading of the aforesaid circular makes it clear that the object behind bringing the circular is for creating an audit trail. In paragraph 2, it has been very clearly mentioned that no communication shall be issued by any income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for doing so in the file, but, he also has to incorporate in the body of such communication the reasons and number and date of approval by the CCIT/DGIT in the specified format. In the facts of the present appeal, admittedly, the assessment order issued manually by the Assessing Officer without generating DIN does not contain any reasons recorded by the Assessing Officer for issuing the order manually without DIN and the number date of the approval granted by the CCIT. Thus, there cannot be any manner of doubt that the Assessing Officer has issued the assessment order without complying with the conditions enshrined in paragraph No. 2 3 of CBDT Circular, referred to above. That being the factual position, in terms of paragraph No. 4 of the said Circular, the assessment order has to be declared as invalid and shall be deemed to have never been issued. 12. Pertinently, while dealing with an identical issue in case of CIT vs. Brandix Mauritius Holdings Ltd. (supra), Hon ble jurisdictional High Court has held as under : 12. We have heard learned counsel for the parties. The present appeal is preferred under Section 260A of the Act. The Court s mandate, thus, is to consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hes to the two circulars even if they be found not in accordance with the correct interpretation of sub-section (2) and they depart or deviate from such construction. It is now well settled as a result of two decisions of this Court, one in Navnitlal C. Javeri v. K.K. Sen [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] and the other in Ellerman Lines Ltd. v. CIT[(1979) 4 SCC 565] that circulars issued by the Central Board of Direct Taxes under Section 119 of the Act are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act. The question which arose in Navnitlal C. Javeri case [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] was in regard to the constitutional validity of Sections 2(6-A)(e) and 12(1-B) which were introduced in the Indian Income Tax Act, 1922 by the Finance Act, 1955 with effect from April 1, 1955. These two sections provided that any payment made by a closely held company to its shareholders by way of advance or loan to the extent to which the company possesses accumulated profits shall be treated as dividend taxable under the Act and this would include any loan or advance made in any previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such transactions and not to bring them within the mischief of the new provision. The directions given in that circular clearly deviated from the provisions of the Act, yet this Court held that the circular was binding on the Income Tax Officer. The two circulars of the Central Board of Direct Taxes referred to above must therefore be held to be binding on the Revenue in the administration or implementation of sub-section (2) and this subsection must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer. [Emphasis is ours] 17.3 Also see the following observations of a coordinate bench in Back Office IT Solutions Pvt. Ltd. v. Union of India, 2021 SCC OnLine Del 2742, in the context of the impact of circulars issued by the revenue: 24....In this context, tax administrators have to bear in mind the well- established dicta that circulars issued by the statutory authorities are binding on them, although, they cannot dictate the manner in which a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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