Legality of Assessment order issued without Document Identification

Prtatap Singh Yadav Vs DCIT (ITAT Delhi); ITA No. 1898/Del/2022; 30/05/2023; 2016-17

Brief Fact of the Case:

• The assessee is a resident individual. The Ld. AO passed the assessment order which does not contain any Document Identification Number (DIN), which is mandatory for any communication issued after 1st October, 2019. The assessment order was passed on 24.12.2021.
• The Assessing Officer issued DIN through a separate communication dated 03.02.2022, which demonstrates that the DIN was not issued within a period of 15 working days of the issuance of the assessment order.

Issue:

Whether, the subsequent communication issued by the Assessing Officer generating the DIN in respect of the assessment order will satisfy the conditions of CBDT Circular No. 19/2019 dated 14.08.2019 and cure the deficiency in issuing the assessment order manually without generating the DIN.

Key Observation of the case:

• Circular 19/2019 dated 14^th August 2019 makes it clear that the object behind bringing the circular is for creating an audit trail. In paragraph 2, it has been very clearly mentioned that 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, on or after the 1st day of October, 2019, unless a computer generated DIN has been allotted and is duly quoted in the body of such communication. Paragraph 3 of the circular carves out certain exceptions to paragraph 2 by providing that under certain exceptional circumstances, enumerated in clause (i) to (v) of paragraph 3, the communication may be issued manually but only after recording reasons in writing not only in the file and with prior written approval of the Chief Commissioner/Director General of Income-tax, but, the communication issued manually in such circumstances must also state the reasons why communication is issued manually without a DIN and must also mention the date and number of written approval of the Chief Commissioner/Director General of Income-tax for issuing manual communication.
• Paragraph 3 of the aforesaid circular, the format for recording such reasons has been specified. Paragraph 4 of the circular makes it clear that any communication issued which, is not in conformity with paragraph 2 and paragraph 3 of the circular, shall be treated as invalid and shall be deemed to have never been issued. 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 assessment order makes it clear that in the body of the assessment order the Assessing Officer has neither recorded the reasons for issuing the assessment order manually without DIN nor the date and number of approval of the Chief Commissioner/Director General of Income-tax. The subsequent communication dated 03.02.2022 issued by the Assessing Officer generating DIN of the assessment order cannot make good the deficiency in the assessment order issued without generating DIN, as, the Assessing Officer has failed to adhere to the conditions of paragraph No. 3 of the extant Circular.
• There cannot be any manner of doubt that the Assessing Officer has issued the assessment order without complying with the conditions enshrined in paragraph No. 2 & 3 of CBDT Circular, referred to above. That being the factual position, in terms of paragraph No. 4 of the said Circular, the assessment order has to be declared as invalid and shall be deemed to have never been issued. Followed Brandix Mauritius Holdings Ovs. V. DCIT, 2022(11)TMI 34 (ITAT Delhi).

In Favour of assessee.