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TMI Blog2024 (7) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. - SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER For the Assessee : Dr. Rakesh Gupta, Advocate Shri Deepesh Garg, Advocate For the Department : Shri H.K. Choudhary, CIT-DR ORDER PER BENCH The six quantum appeals in ITA Nos. 2951, 2952, 2953, 2954, 2955, 2956/Del/2022 and six penalty appeals in ITA Nos. 2945, 2946, 2947, 2948, 2949, 2950/Del/2022 arise out of separate orders dated 28.11.22 and 29.11.22 respectively of the Ld. Commissioner of Income Tax (Appeals)-24, New Delhi ( CIT(A) ) pertaining to Assessment Years ( AYs ) 2007-08, 2008-09, 2009-10, 2010-11, 2012-13 and 2013-14. Since the issues involved are common in both quantum and penalty appeals, these were heard together and are being disposed of by this common order. Quantum Appeals-ITA Nos. 2951, 2952, 2953, 2954, 2955, 2956/Del/2022 2. The assessee has raised the common grounds of appeal in all the six quantum appeals (except the amount of impugned addition which varies in each of the AYs). We reproduce below the grounds raised by the assessee in AY 2007-08 in ITA No. 2951/Del/2022 for reference purposes: 1. That having regard to the facts and circumstances of the ease. Ld CITC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 31.12.2019 is illegal, bad in law, inter alia for the reason that the said assessment orders have been passed without DIN number as is must as held in the judgements of CIT (International Taxation) vs. Brandis Mauritius Holdings Ltd., ITA No. 163/2023, dated 20.03.2023 (Del), PCTT(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 any view of the matter, the passing of impugned assessment orders dated 31.12.2019 is illegal, bad in law and the same is not sustainable on various legal and factual grounds. Since the above grounds of appeal are purely legal, do not require fresh facts to be investigated and go to the root of the matter, it is prayed that the same may please be admitted 3.1 In support of the admittance of the above additional grounds, the assessee placed reliance on the following decisions: i) CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC). ii) National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC). iii) VMT Spinning Co. Ltd. vs. CIT Annr. (2016) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order is accompanied by a covering letter in which the DIN for the order is mentioned and the covering letter is of the same date on which assessment order is framed. Therefore an inference may be drawn that the assessment order contained the DIN. 8. We have considered the submissions of the parties and perused the records. On perusal of the impugned order(s) dated 31.12.2019 of the Ld. AO on record, we observe that the assessment order(s) were accompanied by a covering letter dated 31.12.2019. The covering letter only contains the DIN and letter no. for the said letter and do not mention the DIN for the assessment order(s). Even otherwise, mention of DIN is conspicuous by its absence in the body of the assessment order(s). We therefore do not find any substance in the arguments of the Ld. CIT DR. 9. We have also gone through the CBDT Circular No. 19/2019 dated 14.08.2019, which reads as under:- 10. In para 2 thereof it is stated that in order to prevent instances (narrated in the opening para) and to maintain audit trail of all communication, no communication shall be issued by any Income Tax Authority to the assessee or any other person on or after the 1st day of October, 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio decidendi of the decision of Hon ble Delhi High Court in CIT (International Taxation) vs. Brandix Mauritius Holdings Ltd. dated 20.03.2023 reported in (2023) 293 Taxman 385 (Delhi) and subsequent decisions of the Hon ble Calcutta High Court in the case of M/s. Tata Medical Centre Trust and Hon ble Bombay High Court in the case of Ashok Commercial Enterprises (supra). 14. The Hon ble Jurisdictional High Court of Delhi dismissed the Revenue s appeal in Brandix Mauritius Holdings Ltd. s case (supra) observing and holding as under:- 8.1 In a nutshell, communications referred to in the 2019 Circular would fall in the following slots: i. Those which do not fall in the exceptions carved out in paragraph 3(i) to (v) ii Those which fall in the exceptions embedded in paragraph 30 to (v), but do not adhere to the regime set forth in the 2019 Circular. 8.2 Therefore, whenever communications are issued in the circumstances alluded to in paragraph 3(i) to (v), i.e., are issued manually without a DIN, they require to be backed by the approval of the Chief Commissioner/Director General. The manual communication is required to furnish the reference number and the date when the approval was gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. 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 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Jurisdictional High Court of Delhi in the case of Brandix Mauritius Holdings Ltd. (supra) as well as the binding CBDT Circular 19/2019, we are inclined to quash the assessment order(s) dated 31.12.2019 passed by the Ld. AO under section 254/153C/144 of the Act. As a natural corollary, the impugned order(s) of the Ld. CIT(A) dated 28.11.2022 which is the subject matter of appeals before the Tribunal would have no legs to stand. Accordingly, they are set aside. 16. The additional ground taken by the assessee raising purely legal issue is allowed. We are not adjudicating the appeals on merits. 17. In the result, all six quantum appeals of the assessee are allowed. Penalty Appeals ITA Nos. 2945, 2946, 2947, 2948, 2949, 2950/Del/2022 18. The common grounds of appeal raised by the assessee in all the six penalty appeals (except the amount of impugned penalty which varies in each of the AYs) are as unders: 1. That having regard to the facts and circumstances of the case, Ld. CITIA) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty of Rs. 72,685/- u/s 271(1)(c) and framing the impugned penalty order and that too without assuming jurisdiction as per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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