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TMI Blog2024 (1) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded that the Circular of the Board is binding upon the Revenue Authorities, then, its non-compliance brings the consequences which the Board Circular itself manifests and it is that the communication , which in the present case is assessment order will be deemed to have been never issued. Thus, when Board lays down what shall be the format of any such communication and also provides that if the communication is not in that format the same will be considered as not issued at all, then it is not a mere technical flaw liable to be corrected but it vitiates the communication, i.e the assessment order in the present form. Once assessee has a statuary right to be conveyed such communication , as far as the immediate consequences of the communication not bearing DIN is concerned, as the same is presumed to have never been issued, such communication has no legal foundation left and becomes a voidable communication at the instance of the assessee, irrespective of assessee establishing the plea of prejudice. The difference pointed out in the passing of an order and issuing communication of order is very much clarified by the Circular as the word communication has been pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on) vs. Brandix Mauritius Holdings Ltd. ITA No. 163/2023, dated 20.03.2023 (Del), PCIT(E) vs. M/S Tata Medical Centre Trust, ITAT/202/2023, dated 26.09.2023 (Cal)and Ashok Commercial Enterprises vs. Asstt. CIT, WP No. 2595 of 2021, dated 04.09.2023 (Bom) and CBDT Circular No. 19/2019 dated 14.08.2019. 2. That in any case and in view of the matter, passing of the impugned assessment order u/s 143(3) dated 31.12.2019 is illegal, bad in law and the same is not sustainable on various legal and factual grounds. 3. Considering the fact that the law in regard to mentioning of DIN on the body of communications issued by the Department stands settled by Hon ble Jurisdictional High Court in the case of Brandix Mauritius Holdings Ltd. (149 taxmann.com 238 (Delhi) 2023) and this being a pure question of law, the grounds are admitted. 4. The ld. DR was given time to file the written response on which it was submitted by the ld. DR that provision for DIN is only by way of Circular issued by the CBDT u/s 119 of the Act and is not by an amendment to the Act itself. It was accordingly submitted that Circulars is covered by the delegated legislation and same does not have same for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. DR has further pointed out that presently there are seven decisions of the different High Courts on the issue of DIN. Out of seven, four decisions namely Prakash Lal Khandelwal Vs CIT (151 taxmann.com 72) 2023 of Hon ble Jharkhand HC, Chanderbhan Vs. UOI and others in Writ tax no. 829 of 2023 of Hon ble Allahabad High Court, M/s South Cost Spices Export Pvt. Ltd. WP(C) NO.33771 of 2023 of Hon ble Kerala High Court and Texmo Precision Casting UK Ltd. Vs. CIT(International Taxation) 138 taxmann.com 566 Madras (2022) are in favour of Revenue and three decisions namely Brandix Mauritius Holdings Ltd. ( 149 taxmann.com 238 ( Delhi) 2023 ) Hon ble Delhi High Court, Tata Medical Centre of Hon ble Kolkata High Court and Ashok Commercial enterprises 154 taxmann 144 (Bom) 2023 Hon ble Bombay High Court are in favour of the assessee. It is submitted that in one decision by the Hon ble Bombay High Court in the case of Royal India Corporation Ltd. vs. DCIT, 154 taxmann.com 435 (2023), the Hon ble High Court has set aside the assessment order along with the demand notices etc. because of the facts that the department/AO could not explain why the endorsement as provided in the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons have to be corrected if no serious prejudice is caused to a person. Further the Hon ble Supreme Court has held that the Courts should focus more on doing substantial justice then deciding the cases of procedural /technical violations. 3. The Circular no. 19/2019 talks about the issuance of communications relating to order, notice etc and which has nothing to do so with the passing of the orders like assessment order etc which is governed by provisions of Income Tax Act. It is also reiterated that 263 order was duly communicated electronically with DIN No. on the intimation letter (part of the order only) and as no manual communication was issued and accordingly the instant case is covered by para 2 of the Circular and this case is clearly covered as a case of issuance of electronic communication. 4. The decision of Hon ble Delhi High Court in the case of Brandix Mauritius is not applicable as in that case there was no DIN allotted to the order and also the department could not show intimation letter issued in that case and accordingly the High Court did not deal with the issue of assessment order attached with intimation letter bearing DIN of the order. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause the decision of Hon ble Kerala High Court is binding on the Tribunal even though some of the coordinate benches has decided the issue otherwise . because the decision of the Hon ble Kerala High Court being very recent (i.e. 22.11.2023) of Hon ble Bench, it has not been considered on any if the ITAT decisions submitted by assessee counsel. 5. We have taken into consideration the submissions of ld. DR. However, we find that all these submissions have been duly considered in the coordinate Bench decision in the case of Abhinav Chaturvedi and others, ITA No. 2486/Del/2022, A.Y. 2013-14 decided on 03.08.2023, to which one of us was in the quorum and the issue has been decided against the Revenue. The findings recorded in the case of Abhinav Chaturvedi and others, (supra) is reproduced hereinbelow:- 11. The Bench has given thoughtful consideration to the matter on record and submissions. The issues to be decided first are; First, if there was any illegality in the impugned assessment orders for the reason that the Assessment order did not have DIN quoted on its body. Secondly, if there was any illegality in the impugned assessment orders for the reason the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer; or (iv) when PAN of assessee is not avail able 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 income tax. 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 migration. The communication issued under aforesaid circumstances shall state the fact that the communication is issued manually without a DIN and the date of obtaining of the written 2486 Ors 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIN will be generated prior to uploading of such manual letter or notice or order in ITBA. User may use the same for reference and quoting as Doc. No. in physical copy. 4. Intimation letter will continue to be generated in ITBA. The same document will also be shared with e-Filing portal through e- Proceedings interface for authentication purpose. Assessee can verify the authenticity of the Letter or Notice or Order issued by Income Tax Authorities (ITA) in e-Filing portal. Such intimation along with Letter/Notice/Orders also made available in View/Download Letter/Notice/Orders screen if users wish to dispatch the same through post. Steps to be followed for DIN generation in ITBA application are as below:- i. Navigate to Generate Letter/Notice/Orders ii. Select Manual to System option screen. iii. User will enter the Date of Issue and Manual File No. iv. Click on Save and Generate DIN. NOTE: DIN will be generated in the system and will be displayed in column 'System Doc. No.' User should physically sign the document after quoting DIN before uploading, as the assessee will be viewing the uploaded document on their e-Proceeding account on e- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Boa rd 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 ). So the assessment order itself is a communication and all compliances expected have to be specific to the assessment order. 15.3 Coming back to the assessment orders, in fact as para no. 1 to 3.1 of the assessment order dated 09.08.2021 are considered they mention that notice u/s 153A of the Act was issued through ITBA portal. Subsequent notice u/s 143(2) of the Act was also issued through ITBA Portal. Thus, the notices for the purpose of assessment were issued through ITBA Portal and if thereafter the assessment was carried out manually the assessment order should have mentioned the aforesaid fact to comply with the mandate of Circular with regard to communications issued manually. 16. Further, the Bench takes note of the instructions dated 25.10.19, which lay down that when a document is prepared outside ITBA system and uploaded manually, a DIN is required to be generated prior to uploading the document in ITBA. The instructions make it imperative that the DIN so generated has to be use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 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 it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 in the administration or implementation of sub-section (2) and this sub-section 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifying what all sorts of orders, notices etc. will require DIN on the body. It is not used in the form of a verb indicating the mode of transmission of information or delivery or transmitting a copy thereof as service of the notice referred u/s 282 of the Act. Thus to say that there is merely an improper manner of service and such rigour is mitigated by Section 292BB is quite misconceived. Hon ble Delhi High Court in Brandix Mauritius Holdings Ltd. (supra) has specifically dealt with applicability of Section 292BB and has held as follows; 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. 11. Then coming to the case laws relied we find that the Hon ble Jharkhand High Court judgement in the case of Prakash Lal Khandelwal vs. CIT (supra) has been held to be inapplicable to the extant fact-situation by our coordinate Bench in the case of Abhinav Chaturvedi and others (supra). 11.1 The other judgments which the ld. DR has relied in favour of the Revenue when considered bring forth the fact that in none of them the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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