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TMI Blog2023 (12) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... t Member And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Ved Jain, Advocate, Shri Aman Garg, CA For the Department : Shri P.N. Barnwal, CIT-DR ORDER PER ASTHA CHANDRA, JM The appeal filed by the assessee is directed against the order dated 21.06.2022 of the Ld. Commissioner of Income Tax (Appeals)-24, New Delhi ( CIT(A) ) pertaining to Assessment Year ( AY ) 2015-16. 2. The assessee has taken the following grounds of appeal: 1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad both in 1 the eyes of law and on facts. 2. On the facts and circumstances of the case, the issue of notice and proceedings initiated thereto under section 153C of the Act is bad in law, being barred by limitation and hence the assessment order passed in consequence thereto is liable to be quashed 3. On the facts and circumstances of the case and in law, the assessment order passed by the AO is barred by limitation. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in the hands of assessee. 12. That the appellant craves leave to add, amend or alter any of the grounds of appeal. 3. The assessee filed an application (undated) seeking permission to raise the following additional ground as the same is a legal ground going to the root of the matter and all the facts relating to the same are already on record:- 13. On the facts and circumstances of the case, the assessment order is null and void as the same is in violation of CBDT Circular No.19/2019 requiring mandatory DIN. 4. We have heard the Ld. Representative of the parties. The additional ground raised by the assessee is purely legal and jurisdictional issue going to the root of the matter and all the facts are on record. In National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC), the Hon ble Supreme Court observed that the Tribunal should not be prevented from considering questions of law arising in assessment proceedings. Where the Tribunal is only required to consider the question of law arising from the facts which are on record in the assessment proceedings there is no reason why such a question should not be allowed to be raised when it is necessary to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y mentioned in the intimation letter. Even the Assessee can check via its E-filing portal, which will show the above DIN no. generated for the order dated 24.12.2021. Thus, the contention of the Assessee is factually incorrect and should be rejected. 7. We have considered the submissions of the parties and perused the records. As a matter of fact, we observe that mention of DIN is conspicuous by its absence in the body of the impugned assessment order. 8. We have also gone through the CBDT Circular No. 19/2019 dated 14.08.2019, which reads as under:- Circular No. 19/2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th of 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, Income-tax 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 tax-administration. Presently, almos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anually without a DIN and the date of obtaining of the written approval of the Chief Commissioner / Director General of Income-Tax for issue of manual communication in the following format- .. This communication issues manually without a DIN on account of reason/reasons given in para 3(i)/3(ii)/3(iii)/3(iv)/3(v) of the CBDT Circular No ...dated . (strike off those which are not applicable) and with the approval of the Chief Commissioner / Director General of Income 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nication on the system (ii) Compulsorily generating the DIN on the system (iii) Communicating the DIN so generated to the assessee as per electronically generated proforma available on the system. 11. Para 4 of the Circular says in unequivocal terms that any communication which is not in conformity with para 2 and para 3 shall be treated as invalid and shall be deemed to have never been issued. 12. The case of the assessee is that the communication, namely, the assessment order dated 24.12.2021 for AY 2015-16 is not only without mention of DIN in the body of the order, there is no material on the record mentioning the reason for issuance of order without DIN and the date of approval of Director General / Commissioner of Income Tax for issuance of order without DIN. Though the assessment order was passed on 24.12.2021, however, the Ld. AO subsequently issued DIN through a separate communication (i.e. intimation letter generated suo-moto by the ITBA system) dated 03.02.2022. There is thus violation of the mandate enshrined in para 2 and para 3 of the CBDT Circular No. 19/2019 dated 14.08.2019. Therefore, the consequence mentioned in para 4 of the said Circular, namely tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration. 12.1 As noted above, the impugned order has not been passed on merits. 13. The Tribunal has applied the plain provisions of the 2019 Circular, based on which, it has allowed the appeal preferred by the respondent/assessee. 14. The broad contours of the 2019 Circular have been adverted to by us hereinabove. 14.1 Insofar as the instant case is concerned, admittedly, the draft assessment order was passed on 30.12.2018. 15. The respondent/assessee had filed its objections qua the same, which were disposed of by the Dispute Resolution Panel [DRP] via order dated 20.09.2019. 16. The final assessment order was passed by the Assessing Officer (AO) on 15.10.2019, under Section 147/144(C)(13)/143(3) of the Act. Concededly, the final assessment order does not bear a DIN. There is nothing on record to show that the appellant/revenue took steps to demonstrate before the Tribunal that there were exceptional circumstances, as referred to in paragraph 3 of the 2019 Circular, which would sustain the communication of the final assessment order manually, albeit, without DIN. 16.1 Given this situation, clearly paragraph 4 of the 2019 Circular would apply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, if such loan or advance remained outstanding on the first day of the previous year relevant to Assessment Year 1955-56. The constitutional validity of these two sections was assailed on the ground that they imposed unreasonable restrictions on the fundamental right of the assessee under Article 19(1)(f) and (g) of the Constitution by taxing outstanding loans or advances of past years as dividend. The Revenue however relied on a circular issued by the Central Board of Revenue under Section 5(8) of the Indian Income Tax Act, 1922 which corresponded to Section 119 of the present Act and this circular provided that if any such outstanding loans or advances of past years were repaid on or before June 30, 1955, they would not be taken into account in determining the tax liability of the shareholders to whom such loans or advances were given. This circular was clearly contrary to the plain language of Section 2(6-A)(e) and Section 12(1-B), but even so this Court held that it was binding on the Revenue and since: past transactions which would normally have attracted the stringent provisions of Section 12(1-B) as it was introduced in 1955, were substantially granted exemption from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side-stepped causing prejudice to the assessee by bringing to naught the object for which it is issued. [See: K.P. Varghese vs. Income-tax Officer 1, [1981] 7 Taxman 13 (SC); Also see: UCO Bank, Calcutta v. Commissioner of Income Tax, W.B., (1999) 4 SCC 599]. 18. The argument advanced on behalf the appellant/revenue that recourse can be taken to Section 292B of the Act is untenable having regard to the phraseology used in paragraph 4 of the 2019 Circular. 19. The object and purpose of the issuance of the 2019 Circular, as indicated hereinabove, inter alia, was to create an audit trail. Therefore, the communication relating to assessments, appeals, orders, etcetera which find mention in paragraph 2 of the 2019 Circular, albeit without DIN, can have no standing in law, having regard to the provisions of paragraph 4 of the 2019 Circular. 20. The logical sequitur of the aforesaid reasoning can only be that the Tribunal's decision to not sustain the final assessment order dated 15.10.2019, is a view that cannot call for our interference. 21. As noted above, in the instant appeal all that we are required to consider is whether any substantial question of law ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out generating DIN with the prior approval of the CCIT/DGIT, not only he has to record the reasons 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. ... 13. Thus, keeping in view the aforesaid obs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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