9911796707
TMI Blog2023 (10) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order dated 31.12.2019 passed u/s. 143(3) of the Act and submitted that the assessment order does not contain a DIN. Drawing our attention to Circular No. 19/2019 dated 14.08.2019 issued by the Central Board of Direct Taxes(CBDT), he submitted, it has been mandated that after 1st day of October, 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. He submitted, though, the aforesaid circular provides that 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. He submitted, such reason not only has to be recorded in the body of the communication, but it must also contain the date and number of approval of Chief Commissioner/Director General of Income-tax. Further, he submitted, the CBDT circular further makes it clear that any communication not in conformity with the conditions specified in the circular, shall be treated as invalid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To have a better understanding of the issue, it is necessary to look into the contents of Circular No. 19/2019 dated 14.08.2019 issued by the CBDT : "Circular No. 19 /2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th of August, 2019 Subject: Generation/Allotment/Quoting of Document Identification Number in Notice/Order/Summons/Ietter/correspondence issued by the Income-tax Department - reg. With the launch of various e-governance initiatives, income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax- administration. Presently, almost all notices and orders are being generated electronically on the Income fax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as "communication") were found to have been issued manually, without maintaining a proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Chief Commissioner / Director General of Income Tax vide number .... dated .... " 4. Any communication which is not in conformity with Para-2 and Para-3 above, shall be treated as invalid and shall be deemed to have never been issued. 5. The communication issued manually in the three situations specified in para 3- (i), (ii) or (iii) above shall have to be regularised within 15 working days of its issuance, by - i. uploading the manual communication on the System. ii. compulsorily generating the DIN on the System; iii. communicating the DIN so generated to the assessee/any other person as per electronically generated pro-forma available on the System. 6. An intimation of issuance of manual communication for the reasons mentioned in para 3(v) shall be sent to the Principal Director General of Income-tax (Systems) within seven days from the date of its issuance. 7. Further, in all pending assessment proceedings, where notices were issued manually, prior to issuance of this Circular, the income-tax authorities shall identify such cases and shall upload the notices in these cases on the Systems by 31st October, 2019. 8. Hindi version to follow. Sd/- (Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 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. Therefore, 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. Thus, in such a situation, as per paragraph 4 of the said circular, the assessment order has to be treated as invalid and shall be deemed to have never been issued. 8. Pertinently, while dealing with an identical issue in case of CIT vs. Brandix Mauritius Holdings Ltd. (supra), Hon'ble jurisdictional High Court has held as under : "12. We have heard learned counsel for the parties. The present appeal is preferred under Section 260A of the Act. The Court's mandate, thus, is to consider whether or not a substantial question of law arises for consideration. 12.1 As noted above, the impugned order has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction. It is now well settled as a result of two decisions of this Court, one in Navnitlal C. Javeri v. K.K. Sen [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] and the other in Ellerman Lines Ltd. v. CIT[(1979) 4 SCC 565] that circulars issued by the Central Board of Direct Taxes under Section 119 of the Act are binding on all officers and persons employed in the execution of the Act even if they deviate from the provisions of the Act. The question which arose in Navnitlal C. Javeri case [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] was in regard to the constitutional validity of Sections 2(6-A)(e) and 12(1-B) which were introduced in the Indian Income Tax Act, 1922 by the Finance Act, 1955 with effect from April 1, 1955. These two sections provided that any payment made by a closely held company to its shareholders by way of advance or loan to the extent to which the company possesses accumulated profits shall be treated as dividend taxable under the Act and this would include any loan or advance made in any previous year relevant to any assessment year prior to Assessment Year 1955-56, if such loan or advance remained outstanding on the first day of the previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch transactions and not to bring them within the mischief of the new provision. ' The directions given in that circular clearly deviated from the provisions of the Act, yet this Court held that the circular was binding on the Income Tax Officer. " The two circulars of the Central Board of Direct Taxes referred to above must therefore be held to be binding on the Revenue in the administration or implementation of sub-section (2) and this subsection must be read as applicable only to cases where there is understatement of the consideration in respect of the transfer." [Emphasis is ours] 17.3 Also see the following observations of a coordinate bench in Back Office IT Solutions Pvt. Ltd. v. Union of India, 2021 SCC OnLine Del 2742, in the context of the impact of circulars issued by the revenue: "24....In this context, tax administrators have to bear in mind the well- established dicta that circulars issued by the statutory authorities are binding on them, although, they cannot dictate the manner in which assessment has to be carried out in a particular case. A Circular cannot be side-stepped causing prejudice to the assessee by bringing to naught the object for which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
