Hardik Rao Vs DCIT (ITAT Delhi)
Conclusion: In present facts of the case, the Tribunal held that Assessment Order issued without DIN is null and void as it is in violation of CBDT Circular No. 19/2019 dated 14th August, 2019.
Facts: In present facts of the case, the appeal was filed by the assessee is preferred against the order of the CIT(A)-24, New Delhi dated 21.06.2022 pertaining to A.Y. 2016-17.
The assessee was issued Notice and proceedings were initiated under section 153C of the Income Tax Act without issuance of statutory notices as required under the law making addition of Rs. 15,93,770/- treating the same unexplained money u/s 69A of the Act and confirming addition of 23,907/-on account of commission treating the same as unexplained money u/s 69C of the Act.
The assessee contended before the Tribunal that order passed by Ld. AO being null and void as the same is in violation of CBDT Circular No. 19/2019 dated 1 4th August, 2019.
The Tribunal observed that on perusal of the Circular read with the clarification and FAQ makes it clear that if the assessment order does not follow the mandate of DIN the same has to be treated as invalid non est in law as if it has never been issued.
Reliance was placed upon ITA No. 1542/Del/2020 in the case of Brandix Mauritius Holdings Limited vide order dated 19.09.2022, wherein it was held as under:-
11.The impugned order is hit by this mandate of the Board and, therefore, we are inclined to adjudicate Ground No. 8 [supra] in favour of the assessee by holding that the order dated 15.10.2019 framed u/s 147/144C(13)/143(3) of the Act is invalid and deemed to have never been issued as it fails to mention DIN in its body by adhering to Circular No. 19/2009 dated 14.08.2019.
The said order of the Tribunal was upheld by the Hon’ble Delhi High Court order dated 20.03.2023 in ITA No.163/2023, wherein it was held as under:-
19. The object and purpose of the issuance of the 2019 Circular, as indicated hereinabove, inter alia, was to create an adult trail. Therefore, the communication relating to assessments, appeals, orders etcetra which find mention in paragraph 2 of the 2019 Circular albeit without DIN, can have no standing in law, having regard to the provisions of paragraph 4 of the 2019 Circular.
21.1 We find no error in the view adopted by the Tribunal. The Tribunal has simply the 2019 Circular and thus, reached a conclusion in favour of the respondent/ assessee.
On perusal of the above, it was observed that following the decision of the coordinate Bench and the Hon’ble jurisdictional High Court, the assessment order dated 31.12.2021 framed u/s. 143 (3) r.w.s. 153C of the Act was null and void and nonest.
Further, it was also held that in the interest of justice the liberty was given to the Revenue to approach the Tribunal as per the provisions if the officer brings on record facts to show that the impugned assessment order falls within the exceptions provided in the aforementioned CBDT circular.
Accordingly, the appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal by the assessee is preferred against the order of the CIT(A)-24, New Delhi dated 21.06.2022 pertaining to A.Y. 2016-17.
2. The assessee has raised the following grounds of appeal :-
1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad both in the eyes of law and on facts.
2. On the facts and circumstances of the case, the issue of notice and proceedings initiated thereto under section 153C of the Act is bad in law, being barred by limitation and hence the assessment order passed in consequence thereto is liable to be quashed.
3. On the facts and circumstances of the case and in law, the assessment order passed by the AO is barred by limitation.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153C and the assessment order passed in consequence thereto are bad in law in the absence of any incriminating material belonging to the assessee being found during the search.
5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in dismissing the appeal preferred by the assessee without considering the fact that the impugned assessment order has been passed without issuance of statutory notices as required under the law.
6. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in making addition of Rs. 15,93,770/- treating the same unexplained money u/s 69A of the (ii) That the above addition has been confirmed by arbitrarily rejecting the explanations and the evidences brought on record by the assessee.
7. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming addition of 23,907/-on account of commission treating the same as unexplained money u/s 69C of the Act.
(ii) That the said addition has been made at the rate of 1.5% on the above alleged amounts of unexplained money without there being any basis for the same.
8. On the facts and circumstances of the case, the learned CIT(A) has grossly erred both on facts and in law in confirming the above additions ignoring the fact that assessee’s name is not appearing anywhere in any of the statements recorded during the course of search.
9. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that assessment order has been passed by AO on the basis of surmises and conjectures, without there being any adverse material on record.
10. On the facts and circumstances of the case, the learned CIT(A) has erred both oh facts and in law.
3. Vide letter dated 09.05.2023 the assessee sought permission to raise additional ground of appeal as the same goes to the root of the matter.
4. The assessee has raised the following additional ground of appeal :-
1. The applicant has filed the above said appeal No. 1902/Del/2022 on 18th August, 2022 against the order dated 21.06.2022 passed by the learned Commissioner of Income Tax (Appeals)-24, New Delhi under Section 250 of the Income Tax Act.
2. That while filing the appeal, the applicant has raised 12 grounds of appeal.
3. However, while filing the appeal the appellant inadvertently has left out the ground of appeal relating to order passed by Ld. AO being null and void as the same is in violation of CBDT Circular No. 19/2019 dated 1 4th August, 2019.
4. That accordingly, the applicant is filing additional ground of appeal.
5. That it is submitted that the following additional ground may kindly be taken as the same goes to the root of the issue and all the facts are already on record: “13. 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. ”
6. That the ground revised in this application is legal ground going to the root of the matter, and all the facts relating to the same are already part of record.
7. That in the circumstances, it is prayed that the additional grounds may be taken on record.
5. On the facts and the circumstances of the case the assessment order is null and void as the same is in violation of CBDT circular No. 19/20 19 requiring mandatory DIN.
6. Since the additional grounds goes to the root of the matter we decided to address it first.
7. The assessment order is dated 31.12.2021 and is framed u/s. 143 (3) r.w.s 153C of the Act. A perusal of the order shows that it does not have mandatory DIN.
8. It would be pertinent to refer to the CBDT Circular 19/2019 dated 14.08.20 19 which is binding on the AO and is as under :-
9. The CBDT further clarified the need for the said Circular as under :-
