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TMI Blog2023 (12) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... as held 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 etcetera, to the assessee or any other person, on or after 01.10.2019 unless it is allotted a computer-generated DIN. Decided against revenue. - Shri Shamim Yahya, Accountant Member And Shri Challa Nagendra Prasad, Judicial Member For the Assessee : Shri Rakesh Gupta, Advocate, Shri Deepesh Garg, Advocate For the Revenue : Shri Waseem Arshad, CIT DR ORDER PER BENCH : The aforesaid three appeals filed by the assessee are directed against the respective orders of the ld. CIT (Appeals) for the Assessment Year 2012- 13, 2013-14 2014-15 and the Revenue has filed cross appeal in Assessment Year 2014-15. 2. Since the issues are common connected and the appeals were heard together, these are being consolidated and disposed off by this common order. 3. Although the assessee has raised many grounds, ld. Counsel for the assessee has pressed for additional ground which goes to the root of the validity of juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T CONFER ANY VESTED RIGHT ON ASSESSEE. Administrative issue not within the purview of ITAT vide section 254 of the IT Act 1961 whereas especially, the powers of the High Court and ITAT operate vide distinct spheres. B - VIDE FAQ - OFFICIAL WEBSITE - EVEN A NON - DIN COMMUNICATION CAN BE VALIDATED VIDE PRESCRIBED PROCEDURE AND THERE ARE EXCEPTIONS TOO AND THEREFORE IT WOULD BE AGAINST REASON TO DRAW AN INFERENCE ON THE INTENTION OF THE DEPARTMENT AS ENUNCIATING NON DIN COMMUNICATION AS INVALID .. [The question 2,3A, INDICATE THAT IT CLARIFIES THE CIRCULAR 19 OF 2019]. C - COMMUNICATION OF ASSESSMENT ORDER AN ACT WITHIN JURISDICTION CANNOT INVALIDATE PROCEEDINGS. D- DELHI HIGH COURT - CONSIDERED AND WAS MADE AWARE OF ONLY QUESTION 2, NOT 3,4,5- MATERIAL FACT NOT CONSIDERED, hence the judgement in Brandix cannot constitute a binding precedent. E - FURTHER ASPECTS ON exceptions, subsequent validation and supreme court in R.K.Upadhyaya on the distinction between exercise of jurisdiction and exercise within jurisdiction NOT CONSIDERED OR ADJUDICATED BY DELHI HIGH COURT IN BRANDIX - THEREFORE SUB SILENTIO - NOT A BINDING PRECEDENT. F- Vide ratio of Delhi High Court in SUDEV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and validation procedures provided and invalidation of the assessment orders was declined by the MADRAS HIGH COURT ON THE VERY SAME ASPECTS CANVASSED AND THEREFORE, AT THIS STAGE, CONSTITUTES A BINDING PRECEDENT. 6. We have heard both the parties and perused the records. First, we consider the contents of 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, almost all notices and orders are being generated electronically on the Income fax Business Application (ITBA) platform. However, it has been brought to the notice of the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the file and with prior written approval of the Chief Commissioner/Director General of Income-tax, but, the communication issued manually in such circumstances must also state the reasons why communication is issued manually without a DIN and must also mention the date and number of written approval of the Chief Commissioner/Director General of Income-tax for issuing manual communication. In fact, in paragraph 3 of the aforesaid circular, the format for recording such reasons has been specified. Paragraph 4 of the circular makes it clear that any communication issued which, is not in conformity with paragraph 2 and paragraph 3 of the circular, shall be treated as invalid and shall be deemed to have never been issued. It is fairly well settled, a circular issued u/s. 119 of the Act has statutory force and binding on subordinate authorities working under the Central Board of Direct Taxes. 9. A perusal of the AO s order shows that it is clear in the body of AO s order, no DIN number is mentioned nor there is any reason of not mentioning the DIN number in order of the AO. In such a situation, the AO order will lose its validity. Subsequent separate communication of DIN is a super ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circulars issued by the CBDT in exercise of its powers under Section 119 of the Act are binding on the revenue. 17.2 The aforementioned principle stands enunciated in a long line of judgements, including the Supreme Court s judgment rendered in K.P. Varghese v. Income Tax Officer, Ernakulam and Anr., (1981) 4 SCC 173. The relevant extracts are set forth hereafter: 12. But the construction which is commending itself to us does not rest merely on the principle of contemporanea expositio. The two circulars of the Central Board of Direct Taxes to which we have just referred are legally binding on the Revenue and this binding character attaches to the two circulars even if they be found not in accordance with the correct interpretation of subsection (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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Board of Revenue under Section 5(8) of the Indian Income Tax Act, 1922 on which reliance was placed on behalf of the assessee, this Court observed: Now, coming to the question as to the effect of instructions issued under Section 5(8) of the Act, this Court observed in Navnitlal C. Javeri v. K.K. Sen, Appellate Assistant Commissioner, Bombay [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] : It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under Section 5(8) of the Act. This circular pointed out to all the officers that it was likely that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent/assessee. 10. Thus, keeping in view the aforesaid observations of the Hon ble Delhi High Court and in terms of paragraph 4 of the circular No. 19/2019 dated 14.08.2019, we hold that the impugned AO order is invalid and shall be deemed to have never been passed. Accordingly, we quash the impugned AO order. Further, the issue that a simultaneous DIN number was generated and communicated have been considered by Co-ordinate Bench of the Tribunal in the case of Abhimanyu Chaturvedi vs DCIT in ITA Nos.2486, 2487 and 2488/Del/2022. The relevant paragraph of this order is reproduced hereunder:- 15.1 In this context from the aforesaid Circular no. 19/2019 it can be noted that it mandates that if the communication is issued under aforesaid three exceptions the communication shall state the fact that the communication is issued manually 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 ... d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that forwarding of the intimation of generation of the DIN in ITBA is only a subsequent action and that is not part of assessment order. The manner in which the word communication is defined shows every notice, order, summons, letter and any correspondence from Tax authorities should have a DIN quoted and it is for this reason that the Intimation issued about the DIN of assessment order itself has a DIN quoted on it. 18. In the case in hand the facts coming from the assessment order when considered establish that DIN was not generated prior to uploading the document in ITBA. It is also established that the DIN was not quoted before it was physically signed by the Ld. AO. The generation of DIN subsequently and generation of intimation to be sent to assessee are of no consequence for the purpose of assessment and raising the demand. 5. In the light of the aforesaid order, we are of the opinion that simultaneous issue of the DIN number is insignificant and superfluous exercise, in the absence of mentioning the DIN number on the body of the communication. 11. Since, we have allowed the legal/additional ground raised by the assessee, rest of the grounds have been rendered a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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