Kaliyaperumal Padmanaban Vs ITO (ITAT Chennai)
Conclusion: AO was bound to follow the CBDT circular 19/2019 (F. NO.225/95/2019-ITA.II], DATED 14-82019 and the omission/dereliction was anathema to the basic feature of our Constitution “Rule of Law”, so his impugned action of passing the assessment order without quoting the DIN was held to be arbitrary exercise of power and therefore, invalid.
Held: Assessee challenged the validity of the assessment order asserting that AO failed to follow the law by not incorporating the computer-generated DIN in the body of the assessment order. Assessee argued that this omission contravened the binding CBDT Circular, rendering the assessment order invalid and legally non-existent. To support this contention, Madras High Court judgment was referred in CIT, International Taxation, Chennai v. M/s Laserwoods US Inc., and the Bombay High Court decision in Ashok Commercial Enterprises v. ACIT, which emphasize strict adherence to the DIN mandate. Revenue contended that although the DIN was not incorporated in the assessment order’s body, it was generated and communicated to assessee via an intimation letter on the same day. It was submitted that this subsequent communication sufficed to cure any procedural lapse and that assessee suffered no prejudice, warranting dismissal of the appeal. It was held that the CBDT Circular mandates that the DIN must be quoted in the body of the communication itself, barring limited exceptions which were not applicable in this case. The absence of DIN in the order itself constitutes a violation of the binding Circular, rendering the assessment order invalid ab initio. Tribunal further clarified that subsequent electronic intimation of the DIN could not retrospectively validate a communication that did not conform to the prescribed procedural requirements. Tribunal emphasized that this mandate aligns with the “Rule of Law” principle, and arbitrary omission of statutory procedures could not be condoned. Accordingly, quashed the impugned assessment order for non-compliance with the CBDT Circular regarding DIN under Section 144 read with Section 147 and refrained from adjudicating the substantive merits of the assessment.
