TMI Blog2024 (1) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... th the aforesaid CBDT Circular no 19/2019 are non-est in eyes of law. As we have seen and discussed above, some of these matters have reached the respective Hon ble High Courts and the findings of the Tribunal have been upheld in case of Brandix Mauritius Holding Ltd. and Tata Medical Centre Trust. On this account as well, we respectfully follow the collective wisdom as expounded in various decisions rendered by the Coordinate Benches across the Country and do not see any justifiable basis to deviate from the same. We are of the considered view that the impugned order passed u/s 147 r/w 143(3) cannot be upheld and deserve to be set-aside as the same has been passed in violation of CBDT Circular no 19/2019 r/w CBDT Circular No 27/2019 and the same is hereby treated as non-est in eyes of law. Decided in favour of assessee. - Shri. Aakash Deep Jain, VP And Shri. Vikram Singh Yadav, AM For the Assessee : Shri Ashwani Kumar, C.A, Shri Aditya Kumar and Ms. Muskan Garg, C.A s For the Revenue : Shri Sarabjeet Singh, CIT DR ORDER PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-3, Gurgaon dt. 27/02/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 143(2) was issued to the assessee on 28/11/2019 for necessary compliance on 05/12/2019. Thereafter notice under section 142(1) was issued on 29/11/2019 alongwith detailed questionnaire and the matter was fixed for hearing on 09/12/2019. In response to the said notice, the assessee furnished its reply on 16/12/2019 and thereafter considering the submissions so filed by the assessee but not accepting the same, the assessment order was passed on 17/12/2019 under section 143(3) read with section 147 of the Act wherein the AO has held that the sub contractor firms are bogus parties which are not involved in any actual activities and they were merely created to book bogus expenses and merely filing of confirmation is not adequate to discharge the heavy onus cast on the assessee and since assessee has failed to produce the sub contractors for examination to prove identity and genuineness of the transactions, the onus cast on the assessee has not been discharged, therefore the amount of Rs. 10,30,66,089/- was brought to tax under section 69C of the Act. 4. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) wherein the order of the AO w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d arguments during the course of hearing. 7. During the course of hearing, it has been contended by the Ld. AR that the Ld. CIT(A) has gravely erred in upholding the validity of the assessment order despite the fact that the proceedings had not been conducted in the manner prescribed by the Department instructions issued from time to time which were mandatory for compliance by the AO, as the assessment order was not uploaded on the e-filing portal of the assessee company and was served only through courier and also the same was passed without mentioning DIN on the assessment order. 7.1 In this regard, it was submitted that the proceedings were required to be conducted digitally as mandated by Circular No. 27/2019 dated 26.09.2019 wherein if the AO were to conduct proceedings manually, approval of the higher authorities was to be taken. Since there is no such circumstances where the proceedings were required to be carried out on conventional mode and there is no such approval from the higher authorities, it is submitted the order so passed is void and therefore to be stuck down. In fact, it is prudent to note that the requirements put down in the said circular were subsequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the following cases wherein it has been consistently held that non-mentioning of DIN on the body of the order is not a defect curable u/s 292B and in the absence of a DIN on the body of the order, the said order is deemed to never have been issued: M/s Tata Medical Centre Trust vs. C1T (Exemption), Kolkata ITA No. 238/Kol/2021 reported in 196 ITD 302 M/s Brandix Mauritius Holdings Ltd. Vs. DCIT in ITA No. 1542/DEL/2020 (Delhi ITAT) CIT, International Taxation vs Brandix Mauritius Holdings Ltd in ITA No. 163/2023 (Delhi High Court) Teleperformance Global Services Private Limited vs ACIT, Mumbai in ITA No. 2814 and 2815/Mum/2022 (Mumbai ITAT) Dilip Kothari v Principal Commissioner of Income Tax (Central) 146 taxmann.com 442 (Bangalore Trib) Sidda Venkata Surya Prakasa Rao vs ACIT , Circle -1, Ongole - Hyderabad ITAT (ITA No. 423/Hyd/2020) Pratap Singh Yadav vs DCIT, Central Circle - 7, Delhi - Delhi ITAT (ITA No 1898/Del/2022) 7.6 It was submitted that all the above cases have stood to the fact that in the absence of the DIN being quoted in the body of the order, the said communication is deemed to have never been issued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the introduction of sub-section (3A) to Section 143 of the Act (w.e.f. 1.4.2018) which reads as follows: - 143. (3A)The Central Government may make a scheme, by notification in the Official Gazette, for the purposes of making assessment of total income or loss of the assessee under sub-section (3A) so as to impart greater efficiency, transparency and accountability by (a)eliminating the interface between the Assessing Officer and assessee in course of proceedings to the extent technologically feasible; (b)optimizing utilization of the resources through economies of scale and functional specialization; (c)introducing a team-based assessment with dynamic jurisdiction. The above series of legislative changes represents an effort by the Income Tax Department to shift, gradually, the conduct of assessment proceedings to the electronic mode. The said changes were motivated by a desire to improve taxpayer services, impart enhanced efficiency, transparency and accountability in a paperless environment. The manner in which proceedings were to be conducted electronically has been laid out in circulars issued by the CBDT from time to time. In this regard, the CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such relaxation only in extraordinary circumstances after examining the necessity for such relaxation and recording the reasons for providing such relaxations. A review of the contents of the said circular make it clear that all assessment proceedings, subject to the exceptions provided therein, during Financial Year 2019-20 shall be conducted electronically. In all fairness, the said circular provides that the jurisdictional Pr. CIT/CIT, in extraordinary circumstances such as complexities of the case or administrative difficulties in the conduct of assessment through e-proceedings can permit conduct of assessment proceedings through the conventional mode. It is also provided in the said circular that for assessment to be framed u/s 147, relaxation from e-proceedings can be provided only after prior permission from the jurisdictional Pr CIT/CIT. In the instant case as well, since the assessment proceedings were to be framed u/s 147, they were normally to be conducted under the e-proceedings mode unless an approval of the jurisdictional Pr. CIT/CIT was obtained. It is humbly submitted that, in the given case, as per the information available with the Appellant, no a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards CBDT s Circular No. 19/ 2019 (copy of the circular enclosed at pages 189-190 of the paperbook) which mandates that all communications issued by income tax authorities on or after 01.10.2019 shall mandatorily have a computer-generated DIN which should be duly quoted in the body of such communication. Relevant excerpt from the CBDT Circular is reproduced hereunder: With the launch of various e-governance initiatives, Income-tax Department is moving towards 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 Tax 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 audit trail of such communication. 2. In order to prevent such instances and to maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber .... dated .. .. 4. Any communication which is not in conformity with Para 2 and 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. Thus, the above circular mandates a computer-generated DIN which should be duly quoted in the body of such communication. In exceptional situations for example when there are technical difficulties in generating/ allotting/ quoting the DIN and issuance of communication electronically, the communication may be issued manually but only after recording reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vals being taken from the respective authorities for such contraventions. Thus, the order passed by the Ld. AO suffers from various procedural infirmities. In this connection reference may also be made to provisions of Section 13 of the Information Technology Act, 2000, sub-section (1) of which provides that, save as otherwise agreed to between the originator and the addressee, the dispatch of an electronic record (assessment order in the case under consideration) occurs when it enters in a computer, resources outside the control of the originator ( the Assessing Officer in the instant case). It is implicit in the said provisions that for an assessment order to be validly passed, the same should be uploaded on the efiling portal which is a computer resource outside the control of the Ld. AO. With a view to further amplifying and clarifying the issue, it may be noted that the purpose behind the introduction of the facility of conducting proceedings electronically, among other, was to embed the entire process with a complete degree of transparency and fair-play. Accordingly, it was in the spirit of the said intention that in order for a logical culmination of the procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5(1) 4. Order disposing preliminary objections 27.11.2019 Electronic ITBA/AST/F/17/2019-20/1021166550(1) 5. Notice u/s 143(2) of the Act 28.11.2019 Electronic ITBA/AST/S/143(2)_3/2019-20/1021217573(1) 6. Notice u/s 142(1) of the Act 02.12.2019 Electronic ITBA/AST/F/142(1)/2019-20/1021482893(1) 7. Notice u/s 142(1) of the Act 10.12.2019 Electronic ITBA/AST/F/142(1)/2019-20/1022077703(1) 8. Assessment Order u/s 143(3) r.w.s. 147 of the Act 17.12.2019 Missing 9. Demand Notice u/s 156 of the Act 17.12.2019 Manual ITBA/AST/M/147/2019-20/1022605522(1) In view of the above it is humbly submitted that the order passed is non-est and bad in law being violative of the applicable legal provisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en shot of dispatch of the order and has not controverted the fact that the order was signed manually and was also served manually on the appellant Moreover, the DIN is also hand written on the order. The assessee's ground relates to non-adherence to the circular issued by the CBDT and therefore making the order non-est In fact the Ld Assessing Officer has nowhere controverted the appellant stand that the order was dispatched manually and therefore required the Ld. Assessing Officer to follow the guidelines which required prior approval of the Pr. CIT / CIT and a generation of the DIN within 15 days of the passing of the order. The Ld. Assessing Officer has also stated that there is a DIN that has been generated, which the appellant has quoted in the appeal and therefore the ground of the assessee is not maintainable. However, it is pertinent to mention that the appellants ground and submissions of the appellant nowhere state that no DIN was generated. Infact, the ground of the appellant is that the procedure and the law laid down for issuance of orders has not been followed and the said order of the Board clearly encapsulates that if the said procedure is not fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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 Incometax (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 31th October, 2019. 8. Hindi version to follow. (F.IYo. 225/95/20i9-1TA.II) Thus, the fact that the order was served manually, and that DIN was generated subsequently is not disputed by the Ld. Assessing Officer and therefore the submissions of the appellant made vide its submissions dated 17.02.2021 are reiterated and therefore it is submitted that the order of the Ld. Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which was not in compliance with the above circular. Further the demand notice and assessment order were not uploaded on the e-filing portal of the appellant; rather it was sent through the courier. Even till date no such communication has been uploaded on the ITBA portal of the appellant. Therefore the assessment order was invalid and bad in law. 8.2 Facts and discussion of the case and material on record in this case have been gone through. The order u/s 147/ 143(3) and demand notice u/s 156 in this case have been passed and signed by the AO on 17.12.2019. It is further noted from the record that the AO has generated the DIN no(1022605522(l) for the purpose of the communication of the assessment order/ demand notice on 17.12.2019; ( as evident from page no. 100 of the paper book) which has been duly mentioned by the AO on demand notice. It is relevant to mention here that demand notice and the assessment order cannot be seen in isolation. Further the assessment order alongwith demand notice have been duly communicated by the AO through speed post on 19.12.2019 vide speed post no. 565484916. Limitation period in this case for passing assessment order u/s 143(3) r.w.s. 147 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot of the portal of the AO, reproduced as above. Merely because the DIN no has been mentioned manually in the demand notice would not make it invalid. Though the AO has not mentioned the DIN no in the body of the assessment order, however such omission on the part of the AO is covered by the provision of section 292B of the Act as such assessment order was in substance and effect in conformity with or according to the intent and purpose of this Act. 8.4 Moreover from the assessment record it is observed that the AO in this case has carried out the entire assessment proceedings electronically by issuing various notices through the assessment module of the ITBA portal ( electronic portal of the Department) and the re-assessment order has been duly uploaded on such portal on 17.12.2019 which has been dispatched on 18.12.2019 electronically to the registered email account of the appellant with the Department within the limitation period. Without prejudice to above, for the sake of argument, even if same is not appearing on the e-mail account of the appellant due to certain technical glitches, the fact remains that the AO has uploaded the said re-assessment order on the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer, with the Circular no. 19/2019 dated 14/08/2019 as well as Circular no. 27/2019 dated 26/09/2019 issued by the Central Board of Direct Taxes, while passing the reassessment order u/s 147 r/w 143(3) dated 17/12/2019 for the impugned assessment year 2012-13. It is not in dispute that these CBDT Circulars were subsisting and applicable at the relevant point of time i.e, at the passing of the reassessment order by the Assessing officer and are currently in force and have not been withdrawn by any subsequent Circular(s) issued by the CBDT. 10. The Circular no. 19/2019 dated 14/08/2019 has been issued by the Central Board of Direct Taxes in exercise of its powers u/s 119 of the Act on the subject of generation/allotment/quoting of Document Identification Number in Notices/Order/letter/correspondence issued by the Income Tax Department and the contents thereof read as under: 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the following format- . . .. This communication issues manually without a DIN on account of reason/reasons given in para 3 (i)/3(iI)/3 (iii)/3 (iv)/3 (v) of the CBDT Circular No ... dated .... . (strike off those which are not applicable) and with the approval of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued, there are certain laid down steps and procedure which has been prescribed by the CBDT and which has to be necessarily followed by the income tax authority and no relaxation therein has been envisaged and thus, has to be strictly followed by the income tax authority as part of standard operating standards and procedures. It has been provided that firstly, the reasons in writing have to be recorded by the income tax authority in the file stating the exact exceptional circumstances in a particular case (out of circumstances so envisaged in the circular, thereafter, the approval has to be sought from CCIT/DGIT for issue of manual communication and thereafter, finally, in the body of the manual communication being issued, it has to be stated that the communication is issued manually without DIN and the date of obtaining the approval from CCIT/DGIT. Each of these steps and procedure so envisaged needs to be followed by the income tax authority before issue of manual communication. 13. In paragraph 4 of the aforesaid circular, the CBDT has stated that any communication which is not in conformity with paragraph 2 i.e, communication with computer generated DIN mentioned in the body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reassessment order passed u/s 143(3) r/w 147 of the Act dated 17/12/2019. Therefore, as so provided by CBDT in paragraph 4 of the aforesaid circular, the consequence of any such communication which is issued in violation of and non-compliance with paragraph 2 and 3 is that the same has to be treated as invalid and shall be deemed to never been issued. 18. Before we proceed further, we refer to the contentions advanced by the Ld. CIT/DR and the findings of the ld CIT(A) in paragraph 8.2 of the impugned order wherein he has stated that from perusal of the record, he finds that the AO has generated the DIN no. 1022605522(l) for the purpose of the communication of the assessment order/ demand notice on 17.12.2019 which has been duly mentioned by the AO on demand notice. It has been stated by the ld CIT(A) that the demand notice and the assessment order cannot be seen in isolation and merely because separate DIN number has not been generated would not make the assessment order invalid. 19. During the course of hearing, the ld AR has contested the said findings stating that the reassessment order and notice of demand have been issued under separate sections and therefore, they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 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, 20 19 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication. The emphasis is clearly on each and every communication issued by the income tax authority to the assessee which should carry a DIN and duly quoted on the body of such communication. No exception has been provided whatsoever in respect of one or more communications issued on the same date, simultaneous issue of communications or for that matter, the communications issued to the same assessee on the same date by the same Assessing officer pertaining to same assessment year. The exception which have been envisaged are contained in paragraph 3 (read with paragraph 5) of the said circular and there also, it talks about manual issue of communication without DIN, subsequent generation of DIN and regularization of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on/ show-cause issued by the Assessing Officer electronically (unless specified otherwise) through their E-filing account on the E-filing portal. For smooth conduct of assessment proceedings through E-Proceeding , it is further directed that requisition of information in cases under E-Proceeding should be sought after a careful scrutiny of case records. (ii) In following cases, where assessment is to be framed during the financial year 2019-20, `E-Proceeding shall not be mandatory: a. Where assessment is to be framed under section(s) 153A, 153C and 144 of the Act. In respect of assessments to be framed under section 147 of the Act, any relaxation from e-proceeding due to the difficulties in migration of data from ITD to ITBA etc. shall be dealt as per clause (f) below; b. In set-aside assessments; c. Assessments being framed in non-PAN cases; d. Cases where Income-tax return was filed in paper mode and the assessee concerned does not yet have an E-filing account; e. In all cases at stations connected through the VSAT or with limited capacity of bandwidth (list of such stations shall be specified by the Pr. DGIT (System)); f. In cases cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 19/2019 dated 14.08.2019 regarding generation/ allotment/ quoting of Document Identification Number (DIN). We therefore find that the CBDT through the aforesaid Circular has reiterated the earlier guidelines in terms of Circular No. 19/2019 and has stated that the same has to be strictly followed while issuing notices and communication as part of conduct of proceedings electronically. 24. In the instant case, we find that notice u/s 148 dated 20/03/2019, supply of reasons for initiating proceedings u/s 148 to the assessee vide communication dated 22/08/2019, order disposing off objections dated 27/11/2019, notice u/s 143(2) dated 28/11/2019, subsequent notices u/s 142(1) dated 2/12/2019 and 10/12/2019 have been issued electronically due mentioning DIN Number generated through ITBA portal on each of such communication, however, as far as the reassessment order issued u/s 147(3) r/w 143(3) dated 17/12/2019 is concerned, the same has been issued without mentioning DIN on body of the said communication. There is thus partial non-compliance to this extent of CBDT Circular no 27/2019 by the Assessing officer while conduct of the reassessment proceedings electronically and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, not being [a Joint Commissioner (Appeals) or] a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law; (c) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter IV or Chapter VI-A, where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely: (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee; and (ii) the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed: Provided that the Central Government shall cause every order issued under this clause to be laid before each Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is caused to the assessee. Therefore, in the instant case, as we have noted above, there is non-compliance to the CBDT circulars by the Assessing officer, it will remain non-compliant and the said non-compliance cannot be made good by holding that reassessment order so issued without DIN has been issued within the limitation period so prescribed under the statue and that the same has been sent through speed post and received by the assessee, thus no prejudice is caused to the assessee in terms of non-receipt of the said reassessment order and its right to appeal is not effected by any manner. 27. The matter relating to binding nature of the CBDT Circulars on the income tax authorities has been subject matter of judicial scrutiny and the matter has travelled right up to the Constitutional Courts from time to time and in this regard, useful reference can be drawn to decision of the Hon ble Supreme Court in case of ACIT vs Ahmedabad Urban Development Authority dt. 19/10/2022 reported in 143 taxmann.com 278 wherein it was held as under: 113. Learned counsel for the assessees relied upon Circular No. 1/2009 dated 27.03.2009 and Circular No. 11/2008 dated 19.12.2008 issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on their income either under sub-section (23C) of section 10 or section 11 of the Act on the ground that they are charitable institutions. This is based on the argument that they are engaged in the advancement of an object of general public utility as is included in the fourth limb of the current definition of charitable purpose . Such a claim, when made in respect of an activity carried out on commercial lines, is contrary to the intention of the provision. 5.2 With a view to limiting the scope of the phrase advancement of any other object of general public utility , sub-section (15) of section 2 has been amended to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. Scope of this amendment has further been explained by the CBDT vide its circular no.11/2008 dated 19th Dec 2008. 115. Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words, past transactions which would normally have attracted the stringent provisions of s. 12(1B) as it was introduced in 1955, were substantially granted exemption from the operation of the said provisions by making it clear to all the companies and their shareholders that if the past loans were genuinely refunded to the companies, they would not be taken into account under s. 12(1B). Section 12(1B) would, therefore, normally apply to loans granted by the companies, to their respective shareholders with full notice of the provisions prescribed by it. 117. This court ultimately upheld the amendments. As is evident, the judgment noticed that the circular sought to soften the rigors of the otherwise harsh consequence of immediate application of the amendment. There was nothing in the circular to make it applicable for all times to come. It was more in the nature of the government issuing a temporary suspension of operation of the substantive provision, introduced by the amendment. 118. In UCO Bank, Calcutta (supra), this court had to deal with circulars issued under Section 145 regarding the method of accounting to be followed, in the context of bank loans to be written o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Income Tax113 where the court observed as follows: This contention and the proposition on which it rests, namely, that all circulars issued by the Board have a binding legal quality incurs, quite obviously, the criticism of being too broadly stated. The Board cannot preempt a judicial interpretation of the scope and ambit of a provision of the 'Act' by issuing circulars on the subject. This is too obvious a proposition to require any argument for it. A circular cannot even impose on the tax payer a burden higher than what the Act itself on a true interpretation envisages. The task of interpretation of the laws is the exclusive domain of the courts. However, this is what Sri Ramachandran really has in mind - circulars beneficial to the assessees and which tone down the rigour of the law issued in exercise of the statutory power under Section 119 of the Act or under corresponding provisions of the predecessor Act are binding on the authorities in the administration of the Act. The Tribunal, much less the High Court, is an authority under the Act. The circulars do not bind them. But the benefits of such circulars to the assessees have been held to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proposition that the circulars of the Board, even if they are plainly contrary to the provisions of the Act, should be given effect to and binding on the authorities concerned in the administration of the Act. That is the case of Keshavji Ravji Co. v. I.T. Commissioner [1990] 183 ITR 1(SC) 122. In view of a conflict between decisions, on the binding nature of circulars issued by the Board (in the context of decisions of authorities dealing with indirect taxation issues) this court, by a five-judge decision, in Ratan Melting and Wire Industries (supra) held that 6. Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices and orders are being generated electronically on the Income Tax 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 audit trail of such communication . In order to fill the said statutory vacuum and other stated objectives, the CBDT came out with the aforesaid circular in exercise of its powers u/s 119 of the Act. One can debate as to why Section 282B when was initially introduced, subsequently omitted, cannot be re-introduced in the statue by the legislature, however, the fact of the matter is that instead of legislature exercising its powers on its own by bringing suitable amendment, it choose to invoke the delegated powers to the executive, who in turn by way of delegated powers to CBDT, and thereafter, the CBDT in exercise of its powers u/s 119 has issued the aforesaid circular and as on the date of issue of the said circular, as such. 29. We have looked at the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider whether or not a substantial question of law 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 Give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us 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 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) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 it is issued. [See: K.P.Varghese vs. Income-tax Officer1, [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. 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 cannot call for our interference. 21. As noted above, in the instant appeal all that we are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular. No contrary authority has been brought to our notice. The legal proposition so laid down in the said case therefore squarely applies in the instant case wherein the Assessing officer has issued the reassessment order without mention of DIN on body of the order and therefore, the communication so issued can have no standing in eyes of law and is invalid and deemed never to have been issued and recourse to section 292B cannot be taken. The contention advanced by the Ld. CIT DR thereafter stand duly addressed and cannot be accepted. 32. Again, in the context of CBDT Circular no. 19/2019 dated 14/08/2019, we find that the matter came up for consideration before the Hon ble Bombay High Court in case of Ashok Commercial Enterprises vs Assistant Commissioner of Income tax (Writ petition no 2595 and others) wherein the Hon ble High Court vide its order dated 04/09/2023 has held as under: 18 Whether the impugned assessment order dated 28th September 2021 is invalid on account of it being issued without a DIN? (a) The CBDT, in exercise of powers under Section 119(1) of the Act, has issued a Circular No.19/2019 dated 14th August 2019 providing that no communication sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated; or (v) when the functionality to issue communication is not 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 state 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 the following format- . This communication issues manually without a DIN on account of reason/reasons given in para3(i)/3(ii)/3(iii)/3(iv)/ 3(v) of the CBDT Circular No . dated (strike off those which are not applicable) and with the approval of the Chief Commissioner/Director General of Income Tax vide number . da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for this view in Brandix Mauritius Holdings Ltd. (Supra) where the Hon ble Delhi High Court has held that an order passed in contravention of the said Circular is void, bad in law and of no legal effect. Paragraphs 16 to 17.1, 18 and 19 read as under: 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 Circular would apply. 17. Paragraph 4 of the 2019 Circular, as extracted hereinabove, decidedly provides that any communication which is not in conformity with paragraph 2 and 3 shall be treated as invalid and shall be deemed to have never been issued. The phraseology of paragraph 4 of the 2019 Circular fairly puts such communication, which includes communication of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order of assessment dated 28th September 2021 ought to be treated as invalid and deemed never to have been issued; 33. In the aforesaid case, the facts of the matter were that among various contentions challenging the assessment order passed u/s 153C r/w 144, one of the contentions raised before the Hon ble High Court was that the assessment order doesn t bear a DIN and reference was drawn to the CBDT Circular no 19/2019 as well as the Hon ble Delhi High Court decision referred supra. The Revenue in its submissions stated that the assessment order dated 28/09/2021 and notice of demand dated 28/09/2021 was communicated to the assessee vide letter dated 30/09/2021 having computer generated DIN and thus, the communication of assessment order and notice of demand is done only after creation of DIN number and the same is in compliance with the CBDT Circular no. 19/2019. Negating the submissions on behalf of the Revenue, the Hon ble High Court held that it is indisputable that the assessment order dated 28th September 2021 does not bear a DIN and further that the said order issued without a DIN does not bear the required format set out in paragraph 3 of the Circular an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioning any DIN despite the fact that the DIN for the said order was duly generated and communicated to the assessee through intimation letter along with the said order ? b) Whether in the facts and in the circumstances of the case the Tribunal was justified in law in not appreciating the fact that the intimation letter enclosing the order passed under Section 263 specifically mentioned that Order u/s 263 Dt. 31.03.2021 is having Document No. (DIN) ITBA/REV/M/REV5/2020-21/1032079241(1) , which forms an integral part of the order passed under Section 263? c) Whether in the facts and in the circumstances of the case the Tribunal was justified in law in not appreciating the fact that the DIN which was duly generated and communicated along with the order passed under Section 263 to the assessee was in compliance of the Circular No. 19/2019 dated 14.08.2019 issued by CBDT ? d) Whether the Tribunal was justified in law to dismiss the miscellaneous application without considering the issue of generation of the DIN Number being a ground for rectification of a mistake apparent from record as per section 254(2) of the said Act ? We have heard Ms. Smita Das De, learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the appeal is dismissed. The stay application IA No.GA/1 /2023 is also dismissed 35. In the aforesaid case, briefly the facts of the case are that the assessment was originally completed under section 143(3) of the Act. Subsequently, the Ld. CIT(E), Kolkata issued a show cause and thereafter, an order under section 263 was passed against which the assessee moved in appeal before the Coordinate Kolkata Bench and by way of additional grounds of appeal, it was contended that the order passed by the Ld. CIT(E) was null and void as it fails to mention any DIN number on its body or adhering to Circular number 19/2019 issued by CBDT. The Coordinate Kolkata Bench gave a finding that the order under section 263 has been issued manually which doesn t bear the signature of the authority passing the order. Further, it was held that from the perusal of the order passed under section 263 of the Act in its entire body of the order, there is no reference to the fact of the order being issued manually without a DIN for which the written approval of Chief Commissioner / DGIT was required to be obtained in the prescribed format in terms of para 4 of the CBDT Circular and such a lapse i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply the same selectively in some cases and ignore in other cases. 37. The Coordinate Kolkata Bench thereafter held the order passed by the Ld. CIT(E) as invalid and never been issued as it fails to mention DIN number in its body by adhering to CBDT Circular No. 19/2019. Thereafter the matter was carried in appeal before the Hon ble Calcutta High Court. During the course of hearing, the Ld. Counsel for the Revenue submitted that the Tribunal was not justified in not appreciating the fact that intimation letter enclosing the order passed under section 263 was having a DIN number and which forms the integral part of the order passed under section 263 of the Act. The Hon ble High Court didn t accept the said submissions and held that in the intimation letter, there is nothing mentioned as to why in the substantive order, the DIN number was not mentioned as mandated in the CBDT Circular more particularly in paragraph 2 of the said Circular. The Hon ble High Court held that the body of the communication must contain the fact that the communication is issued without DIN number and reasons thereof and accordingly the Hon ble High Court upheld the findings of the Tribunal referring to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the present case, we are not inclined to entertain the writ petition in view of the availability of statutory alternative remedy. The petitioner has otherwise participated in the proceedings. All questions of fact and law are otherwise left open for appropriate examination by the appellate authority. The main argument is that the order is without jurisdiction since notices were not issued on DIN. This argument is noticed only to be rejected since no prejudice is shown to have been caused to the petitioner on account of issuance of manual notices. Admittedly, the petitioner has acknowledged receipt of such notice and has also submitted his objections, which have been duly adverted to. Non-issuance of notice on DIN would thus not be a ground to entertain the writ petition, notwithstanding the availability of alternative remedy. Subject to the observations made above, this petition is consigned to records. 41. In the aforesaid case, a writ petition was moved by the petitioner before the Hon ble High Court assailing the assessment order passed u/s 147 of the Act and it was contended that the notice u/s 148 of the Income Tax Act was issued manually instead of it being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, no prejudice is caused to the assessee. 42. Further, the Hon ble Kerela High Court in case of South Coast Spices Pvt Ltd vs Principal Commissioner of Income tax (Writ petition no. 33771 of 2023 dated 16/10/2023) reported in 2023:Kerela:63576 has held as under: 4. The satisfaction notes recorded by the Assessing Authority, which have been placed on record in Exts.P19 to P24, would suggest that the Assessing Authority has examined the documents and recorded satisfaction for issuing notices under Section 153C of the IT Act. The petitioner has demanded the satisfaction note, and the letter issued by the Assistant Commissioner of Income Tax in Ext.P18, whereby the satisfaction notes have been provided to the petitioner on his demand, would disclose that the letter bears the DIN number. The satisfaction note need not bear the DIN number, and this Court does not find any substance in the submission of the learned Counsel for the petitioner that since the satisfaction notes do not bear the DIN number, whole proceedings are invalid. 4.1 The judgment cited by the learned Counsel for the petitioner in the of Ashok Commercial Enterprises (supra) is of no help to the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) when the functionality to issue communication is not 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 state 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 the following format . This communication issues manually without a DIN on account of reason/reasons g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid case, a writ petition was moved by the petitioner before the Hon ble High Court assailing the assessment order passed u/s 153C of the Act and it was contended that the satisfaction note recorded prior to issue of notice u/s 153C of the Income Tax Act doesn t contain the document identification number (DIN) which is in violation of the Circular issued by the department and therefore, the whole proceedings are invalid. The Hon ble High Court has however refused to entertain the writ petition and held that the satisfaction note is a document prepared by the Assessing officer which is kept in the file, and unless an assessee demands the satisfaction note, it is not required to be provided to the assessee and there was thus, no requirement to have a DIN number in the satisfaction note recorded by the Assessing Authority. At the same time, when the satisfaction note was provided to the petitioner, the communication bears DIN. The Hon ble High Court has thus laid emphasis on internal documentation to be maintained by the AO and the documentation to be shared with the assessee and further, the relevant point of time when the internal documentation is shared/communicated with the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was communicated after 31.03.2022. The Petitioner contended that DIN is mandatory for uploading of any manual order. 8. The case of the Revenue is that the assessment order dated 31.03.2022 passed in the case of the petitioner for AY 2014-15 is not barred by the limitation period provided under Section 153(3). It is submitted that Section 153 (3) provides the time line only for making of an assessment order and not for communicating or issuing the assessment order. Accordingly, what is required under Section 153(3) is that the assessment order may be made by the given date and the same is clear from Section 153 (3) of the Act. 9. To decide the rival contentions of the parties section 153 of the Act is quoted hereunder: 153. (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable: Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words twenty-one months , the words eighteen m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or limitation period prescribed under Section 153 (3) for issue of order , uploading of order on web portal or communication of order . The Hon ble Supreme Court in the case of CIT v. Mohd. Meeran Shahul Hameed, (2022) 1 SCC 12, while interpreting Section 263 of the Income Tax Act, 1961, which uses similar expression like Section 153 (3), has held the following: 4.2. While deciding the aforesaid issues and question of law, Section 263(2) of the Income Tax Act, which is relevant for our consideration is required to be referred to, which reads as under: 263. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. 4.3. On a fair reading of sub-section (2) of Section 263 it can be seen that as mandated by sub-section (2) of Section 263 no order under Section 263 of the Act shall be made after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Therefore the word used is made and not the order received by the assessee. Even the word dispatch is not mentioned in Section 263(2). Therefore, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . No costs. 11. In the case at hand, the order sheet at Annexure B to the supplementary affidavit of the revenue dated 07.12.2022, shows that the assessment order was made/generated on 31.03.2022 and the intimation letter was issued on 03.04.2022. Therefore, the contention of the petitioner, that the said assessment order, dated 31.03.2022 which was uploaded on the web portal on 01.04.2022 and communicated to the petitioner on 03.04.2022 is barred by limitation, is misconceived and not sustainable in law, inasmuch as, section 153 (3) controls only making of order. There is no restriction or limitation period prescribed under Section 153 (3) for issue of order , uploading of order on web portal or communication of order. 12. Further, in the present case the assessment order, dated 31.03.2022, was uploaded on web portal on 01.04.2022, which is just the next day after 31.03.2022, and even the DIN was generated on 01.04.2022. Accordingly, the delay, if any, in uploading or DIN was just of one day. In this factual background, it is also to be considered that specific expressions used in Section 153 (3) of the Income Tax Act, 1961 cannot be interpreted and applied as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022, which was uploaded on 01.04.2022, is invalid in law. At the cost of repetition, the different expression used by the legislature at different places has certainly a different objective. Making of the order and communication of the order are two different things. Even the circular stipulates communication of the order and not making of the order as it says every communication relating to assessment, appeal, order etc. shall have a DIN on the body of the order. 14. The Petitioner has contended that impugned order is antedated. It is a purely factual issue also disputed by the revenue. As such, the petitioner has a statutory alternate remedy to challenge the assessment order before the Commissioner of Income Tax (Appeals) where he may raise such plea. 15. Consequently, the instant writ application is dismissed. Petitioner has failed to satisfy any of grounds to invoke the writ jurisdiction of this Court by passing the statutory alternative remedy. The petitioner is at liberty to avail the alternate remedy to challenge the impugned assessment order. He would be at liberty to raise all those points before the appellate authority. It is made clear that we have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of communication which in the instant case is 03/04/2022 will after the cutoff date of 31/03/2022 and it was contended that what is relevant is issue as well as services of any communication within the prescribed limit so prescribed by the statute. It was further contended that the assessment proceedings have become time barred as only on 03/04/2022, the order dt. 31/03/2022 was uploaded on the web portal of the assessee and communicated to the email address of the assessee only on 01/04/2022 indicating the DIN number of the impugned order and a corrigendum was also issued on 11/04/2022 in order to cover up the anomalies and defect in the order and it was contended that the order and the communication dt. 01/04/2022 shows that the order was antedated. In response, the Ld. Counsel for the Revenue submitted that Section 153(1) and 153(2) used the expression shall for prescribing the time limit for making the relevant assessment order and Section 153(3) uses the expression may for prescribing the time limit for making the relevant assessment order. It was submitted that unlikely Section 153(1) and 153(2) which are stringent and mandatory, Section 153(3) is only directory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avail the alternate remedy to challenge the assessment order on merits of the case. 48. We therefore find that even though the contentions have been raised by the assessee regarding the binding nature of the CBDT Circular and non mentioning of DIN on the body of the assessment order as well as the fact that the order is barred by the limitation in terms of Section 153(3) of the Act, the Hon ble High Court has mainly examined the provision of Section 153(1), 153(2) and 153(3) and held that the provisions of Section 153(3) only provides for making of the assessment order and not for communicating or issuing the assessment order and has held that the expression used in Section 153(3) cannot be interpreted and applied in a stricter sense and the order so issued by not barred by limitation. We therefore find that the said decision cannot comes to the aid of the Revenue in as much as there is no specific finding which has been recorded by the Hon ble High Court discussing the contention raised by the assessee regarding the binding nature of the CBDT Circular and non mentioning of the DIN on the body of the assessment order and the consequences that will follow as stated in the CBDT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of these matters have reached the respective Hon ble High Courts and the findings of the Tribunal have been upheld in case of Brandix Mauritius Holding Ltd. and Tata Medical Centre Trust. On this account as well, we respectfully follow the collective wisdom as expounded in various decisions rendered by the Coordinate Benches across the Country and do not see any justifiable basis to deviate from the same. 51. In light of the aforesaid discussion and in the entirety of facts and circumstances of the case, we are of the considered view that the impugned order passed u/s 147 r/w 143(3) cannot be upheld and deserve to be set-aside as the same has been passed in violation of CBDT Circular no 19/2019 r/w CBDT Circular No 27/2019 and the same is hereby treated as non-est in eyes of law. In the result, the ground no. 5 of the assessee s appeal is allowed. 52. In view of the aforesaid discussions where we have set-aside the reassessment order, other grounds of appeal on merits of the case, etc have become academic in nature and we don t deem it necessary to adjudicate the same. These grounds of appeal are thus left open, to be decided at appropriate time should the need for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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