VALIDITY OF ASSESSMENT ORDER IN THE ABSENCE OF DOCUMENT IDENTIFICATION NUMBER

[Mr. M. GOVINDARAJAN]

Document Identification Number

The Central Board of Direct Taxes (‘Board’ for short)  issued circular No. 19/2019 on 14.08.2019 for the issuance of ‘Document Identification Number’ (‘DIN’ for short).  The Board has decided 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 01.10.2019 unless a computer-generated DIN has been allotted and is duly quoted in the body of such communication.

The circular also provides the exceptional circumstances under which the above procedure may not be followed as detailed below-

• when there are technical difficulties in generating/allotting/quoting the DIN and issuance of communication electronically; or
• when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, tor discharging, his Official duties; or
• when due to delay in PAN migration, PAN is lying with non-jurisdictional Assessing Officer; or
• when PAN of assesses is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated: or
• When the functionality to issue communication is net available in the system,

the communication may be issued manually but only after recording reasons in writing in the file and with prior written approval of the Chief Commissioner / Director General of income-tax. In cases where manual communication is required to be issued due to delay in PAN migration, the proposal seeking approval for issuance of manual communication shall include the reason for delay in PAN migration. The communication issued under aforesaid circumstances shall stale 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.  Any communication which is not in conformity with the above shall be treated as invalid and shall be deemed to have never been issued.  The communication issued manually in the three situations specified above shall have to be regularized within 15 working days of its issuance, by-

• uploading the manual communication on the System.
• compulsorily generating the DIN on the System;
• communicating the DIN so generated to the assessee/any other person as per electronically generated pro-forma available on the System.

An intimation of issuance of manual communication for the reasons mentioned above shall be sent to the Principal Director General of Income-tax (Systems) within 7 days from the date of its issuance.

The above said circular issued under section 119 of the Act has statutory force and is binding on subordinate authorities working under the Board.

In THE COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) -1, NEW DELHI VERSUS BRANDIX MAURITIUS HOLDINGS LTD.  - 2023 (4) TMI 579 - DELHI HIGH COURT observed that the final assessment order does not bear a DIN. There is nothing on record to show that the appellant/revenue took steps to demonstrate before the Tribunal that there were exceptional circumstances, as referred to in the Circular, which would sustain the communication of the final assessment order manually, albeit, without DIN.  In the instant appeal all that we are required to consider is whether any substantial question of law arises for consideration, which, inter alia, would require the Court to examine whether the issue is debatable or if there is an alternate view possible. Given the language employed in the 2019 Circular, there is neither any scope for debate not is there any leeway for an alternate view.  The High Court found no error in the view adopted by the Tribunal. The Tribunal has simply applied the provisions of the 2019 Circular and thus, reached a conclusion in favor of the respondent/assessee.  Thus the High Court closed the case of the Revenue.

In RAMA PASHU AAHAR (P) LTD., C/O RRA TAXINDIA, VERSUS ACIT, CENTRAL CIRCLE 14, NEW DELHI. (VICE VERSA) - 2023 (10) TMI 126 - ITAT DLEHI, the present appeal was filed by the assessee arised out of order of Commissioner of Income Tax (Appeals)-26, New Delhi pertaining to the assessment year 2017- 8.  The appellant raised an additional ground challenging the validity of the assessment order, as it does not contain a DIN.  The Income Tax Appellate Tribunal (‘ITAT’ for short) admitted the said additional ground since the issue raised is a purely legal and jurisdictional issue going to the root of the matter and it can be decided without making fresh investigation into the facts.

The appellant submitted the following before ITAT-

• The assessment order does not contain a DIN.
• It has been mandated that after 01.10.2019, no communication shall be issued by any Income-tax authority unless a computer generated DIN has been communicated and is quoted in such communication.
• Under certain exceptional circumstances, the concerned Income-tax authority is permitted to issue the communication manually, but he has to record reasons in writing and obtain prior written approval of Chief Commissioner/Director General of Income-tax for issuing the communication manually without DIN. 
• The said communication must also contain the date and number of approval of Chief Commissioner/Director General of Income-tax.
• Any communication not in conformity with the conditions specified in the circular, shall be treated as invalid and shall be deemed to have never been issued.
• In the manually communicated assessment order without containing DIN, the Assessing Officer has not recorded the reasons nor has mentioned the approval number and date of Chief Commissioner/Director General of Income-tax.

Therefore he prayed that in terms with the Board circular, assessment order has to be declared as invalid and should be deemed to have never been issued.

The Revenue submitted that due to certain technical issues at the time of communicating the assessment order, DIN could not be generated.   After obtaining approval of Chief Commissioner of Income-tax on 31.12.2019, the Assessing Officer has generated the DIN on 19.01.2020 which is within 15 working days.  Thus, he submitted that the Assessing Officer has fully complied with the Board’s circular and the assessment order cannot be treated as invalid.

The ITAT considered the submissions made by the appellant and the Revenue.  The ITAT observed that the assessment order does not contain any computer generated DIN.  The ITAT analyzed the Circular No. 19/2019, dated 14.08.2019.  The ITAT observed that the object behind bringing the circular is for creating an audit trail. 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.  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.    Even assuming that the Assessing Officer might have generated the DIN or had obtained approval of the concerned authority, however, since he has not incorporated the reasons of issuing the assessment order manually without DIN and date and number of approval in the body of assessment order, it does not comply with the conditions of paragraph 3 of the extant circular.  Therefore the ITAT held that the assessment order has to be treated as invalid and shall be deemed to have never been issued.  Accordingly the ITAT allowed the appeal and quashed the impugned order and also dismissed the appeal filed by the Revenue since it becomes infructuous.