Order passed without DIN invalid and shall be deemed to have never been passed: ITAT
The Income Tax Appellate Tribunal (ITAI) in the matter of Rhone Associates Pvt. Ltd. vs. ACIT has stated that Order passed without DIN invalid and shall be deemed to have never been passed.
Relevant Text of the Judgment Stated:
This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-30, New Delhi dated 16.12.2022 for the AY 2012-13.
Although raised many grounds, Id. Counsel for the assessee has prayed for additional ground and submitted that it goes to the root of the validity of jurisdiction in this case. The additional ground reads as under:
“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.”
The assessment order in this case is dated 04.12.2019. At the outset, ld. Counsel of the assessee submitted that there is no DIN mentioned in the assessment order which is contrary to the CBDT Circular No.19/2019 dated 14th August 2019. He further submitted that in such a situation, jurisdiction assumed is invalid. For this, ld. Counsel of the assessee relied upon catena of case laws.
Thus, keeping in view all observations of the Hon’ble Delhi High Court and in terms of paragraph 4 of circular No. 19/2019 dated 14.08.2019, hold the impugned AO order is invalid and shall be deemed to have never been passed. Accordingly, quash the impugned assessment 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:
In this context from the mentioned Circular no. 19/2019 it can be noted that it mandates that if the ‘communication’ is issued under mentioned 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 … dated …. (strike off those which are not applicable) and with the approval of the Chief Commissioner / Director General of Income Tax vide number …. dated .. .. ”
To make it crystal clear here the words ‘Communication’ is not used to define merely the mode of transmission of the information but the circular No 19 of 2019 makes it clear by defining it in following words “However, 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”). So the assessment order itself is a communication and all compliances expected have to be specific to the assessment order.
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.
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 used for reference and quoting a document number in a physical copy. The instructions specifically provide that the user (assessing officer) should physically sign the document after quoting DIN, before uploading. Meaning thereby that generation of DIN is condition precedent for making an assessment manually or otherwise on the ITBA and then before it is uploaded on ITBA, first it should have DIN bearing on its face and then only it should be signed. Thus for the purpose of section 153A/143(3) of the Act, the assessment can be said to be ‘made’ only when the DIN is quoted on the order before it is signed. If without first generating the DIN and before it is quoted on the order, the order is signed, the order is non-est.
The Bench is of considered view 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.
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.
In the light of the aforesaid order, 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.
Since, it allowed the legal/additional ground raised by the assessee, rest of the grounds have been rendered academic and do not required adjudication.
In the result, this appeal filed by the assessee is allowed as indicated above.
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