Income Tax order without Document Identification Number (DIN) is void ab initio. subsequent separate communication of DIN is a superfluous exercise.– ITAT
ABCAUS Case Law Citation:
ABCAUS 3818 (2023) (11) ITAT
Important Case Laws relied upon by parties:
K.P. Varghese v. Income Tax Officer, Ernakulam and Anr., (1981) 4 SCC
Abhimanyu Chaturvedi vs DCIT
Back Office IT Solutions Pvt. Ltd. v. Union of India, 2021 SCC OnLine
CIT vs Brandix Mauritius Holdings Ltd.
In the instant case, the assessee had challenged the order passed by the CIT(A) rejecting the appeal of the assessee challenging the order passed by the Assessing Officer (AO) as null and void being not containing DIN as mandated by CBDT.
Before the Tribunal the assessee contended that there was no DIN mentioned in the AO’s order which is contrary to the CBDT Circular No.19/2019 dated 14th August 2019. Hence, the order is void ab initio.
Placing reliance on catena of case laws, it was submitted that in such a situation, jurisdiction assumed is invalid and whole proceedings are vitiated.
Income Tax order without Document Identification Number (DIN) is void ab initio.
The Tribunal observed that as per said Circular, in order to maintain proper audit trail of all communication, the CBDT in exercise of power under section 119 of the Income Tax Act, 1961 (the Act), has mandated that on or after the 1st day of October, 2019 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 etc, to the assessee or any other person, unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communications.
Further, the said Circular mandates that in exceptional circumstances (technical problems etc.), in the body of the order / communication, it has to be stated that the communication is issued manually without a DIN and the date of obtaining of the written approval of Chief Commissioner / Director General of Income-Tax. Paragraph 4 of the circular makes it clear that any communication issued which, is not in conformity shall be treated as invalid and shall be deemed to have never been issued.
The Tribunal pointed out that 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.
The Tribunal opined that since in the body of AO’s order, no DIN number was mentioned nor there was any reason of not mentioning the DIN number in order of the AO, the order will lose its validity and subsequent separate communication of DIN is a superfluous exercise.
The Tribunal noted that under identical issue, the Delhi High Court had rejected the appeal of the Department observing that no substantial question of law arises for consideration in view of the clear language in the CBDT Circular, there was neither any scope for debate not was there any leeway for an alternate view.
Accordingly, the Tribunal quashed the order and held that the impugned AO order was invalid and shall be deemed to have never been passed.
Issue of simultaneous DIN number and communication to assessee
On the issue of validity of AO’s order when a simultaneous DIN number is generated and communicated separately to the assessee, the Tribunal noted that it has been dealt with by the Co-ordinate Bench.
The Co-ordinate Bench had held that when DIN was not generated prior to uploading the order in ITBA or the DIN was not quoted before it was physically signed by the 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.
Noting the above judgment of the Co-ordinate Bench, the Tribunal opined that since, it has allowed the legal ground raised by the assessee, rest of the grounds have been rendered academic and do not require adjudication.
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