TMI Blog2023 (4) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of audit trail DIN is mandatory and without DIN any communication is deemed to have never been issued except for the exceptions contained therein. We are therefore unable to agree with this contention of the revenue. Appeal of assessee allowed. - AMIT SHUKLA (JUDICIAL MEMBER) AND MS. PADMAVATHY S. (ACCOUNTANT MEMBER) For the Assessee : Shri J.D. Mistry For the Department : Shri Vivek Perumpura SRAR ORDER These appeals are against the order of the Assistant Commissioner of Income Tax Circle 5(3)(1), Mumbai passed u/s.144C r.w.s.144C(13) of the Income Tax Act (the Act) for assessment year 2017-18 and 2018-19 dated 26.07.2022. The issues are common in both the appeals and they were heard together and disposed off together by this common order. 2. The assessee is engaged in the business of providing IT enabled services (ITeS), BPO services, call centre and contract centre services, back office processing, outsourcing services, data processing and analysis including assimilation, sorting, processing and communication of data and graphs etc. The brief facts pertaining to AY 2017-18 are that the assessee filed the return of income for AY 2017-18 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Appellant company received an intimation for the availability of impugned assessment order on the e-filing portal vide message on 07 September 2022. 2.3 Based on the facts and in circumstances of the case and in law, the Ld. AO has erred in passing the impugned assessment beyond the time limit prescribed and null and void. 4. The ld. AR submitted that the final order passed u/s.143(3) r.w.s.144C(13) is in violation of the CBDT Circular No.19 of 2019 dated 14.8.2019. The ld. AR submitted that the said order is a manual order without any DIN mentioned therein. It is also submitted the AO has given a separate intimation dated 02.09.202 stating that DIN has been generated for the said manual order. The ld. AR drew our attention to paragraph 3 of the above mentioned Circular wherein the CBDT has laid down certain procedures to be followed when a manual order is issued under exceptional circumstances. The ld. AR argued that the assessee is not aware for the exceptional circumstances under which the manual order is issued and whether the procedure as laid down in para 3 have been complied with since there is no mention of the same in the order issued u/s. 143(3) r.w.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises for consideration. 12.1 As noted above, the impugned order has not been passed on merits. 13. The Tribunal has applied the plain provisions of the 2019 Circular, based on which, it has allowed the appeal preferred by the respondent/assessee. 14. The broad contours of the 2019 Circular have been adverted to by us hereinabove. 14.1 Insofar as the instant case is concerned, admittedly, the draft assessment order was passed on 30.12.2018. 15. The respondent/assessee had filed its objections qua the same, which were disposed of by the Dispute Resolution Panel [DRP] via order dated 20.09.2019. 16. The final assessment order was passed by the Assessing Officer (AO) on 15.10.2019, under Section 147/144(C)(13)/143(3) of the Act. Concededly, 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 paragraph 3 of the 2019 Circular, which would sustain the communication of the final assessment order manually, albeit, without DIN. 16.1 Given this situation, clearly paragraph 4 of the 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to Assessment Year 1955-56, if such loan or advance remained outstanding on the first day of the previous year relevant to Assessment Year 1955-56. The constitutional validity of these two sections was assailed on the ground that they imposed unreasonable restrictions on the fundamental right of the assessee under Article 19(1 )(f) and (g) of the Constitution by taxing outstanding loans or advances of past years as dividend. The Revenue however relied on a circular issued by the Central Board of Revenue under Section 5(8) of the Indian Income Tax Act, 1922 which corresponded to Section 119 of the present Act and this circular provided that if any such outstanding loans or advances of past years were repaid on or before June 30, 1955, they would not be taken into account in determining the tax liability of the shareholders to whom such loans or advances were given. This circular was clearly contrary to the plain language of Section 2(6-A)(e) and Section 12(1-B), but even so this Court held that it was binding on the Revenue and since: past transactions which would normally have attracted the stringent provisions of Section 12(1-B) as it was introduced in 1955, were substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out in a particular case. A Circular cannot be side-stepped causing prejudice to the assessee by bringing to naught the object for which it is issued. {See: K.P.Varghese vs. Income-tax [1981] 7 Taxman 13 (SC): Also see: UCO Bank, Calcutta v. Commissioner of Income Tax, W.B., (1999) 4 SCC 599]. 18. The argument advanced on behalf the appellant/revenue, that recourse can be taken to Section 292B of the Act, is untenable, having regard to the phraseology used in paragraph 4 of the 2019 Circular. 19. The object and purpose of the issuance of the 2019 Circular, as indicated hereinabove, inter alia, was to create an audit trail. Therefore, the communication relating to assessments, appeals, orders, etcetera 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, albeit without DIN, can have no standing in law, having regard to the provisions of paragraph 4 of the 2019 circular. 20. The logical sequitur of the aforesaid reasoning can only be that the Tribunal's decision to not sustain the final assessment order dated 15.10.2019, is a view that can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 (hereinafter referred to as the Act ), 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 1st day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication. 3. In exceptional circumstances such as, (i) when there are technical difficulties in generating / allotting / quoting the DIN and issuance of communication electronically; or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties: or (iii) when due to delay in PAN migration. PAN is lying with non-jurisdictional Assessing Officer; or (iv) when PAN of assessee 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 (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nication shall be issued unless a DIN is allotted and is quoted in the body of the letter except under exceptional circumstances as mentioned in Para 3 which also lays down certain procedures to be followed for issue of manual order under certain circumstances. Accordingly the manual communication should mention 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 in a specific format. Para 4 of the circular states that the communication issued manually not in conformity with Para-2 and Para-3 of the circular, shall be treated as invalid and shall be deemed to have never been issued. 11. In assessee s case there is no dispute about the fact that the impugned order u/s. 143(3) r.w.s.144C(13) of the Act has been issued manually. It is also noticed that the DIN for the order is generated through separate intimation. The argument of the ld DR that the intimation dated 02.09.2022 is part of the order and that there is no violation cannot be accepted as generating the DIN by separate intimation is allowed to be done to regularise the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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