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TMI Blog2024 (2) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi, date 31.12.2019 - Do - 1524/Del/2021 - Do - 10336/2019-20 date 13.08.2021 ACIT, Central Cir.25, New Delhi, date 31.12.2019 - Do- 1525/Del/2021 - Do - 10338/2019-20 date 13.08.2021 ACIT, Central Cir.25, New Delhi, date 31.12.2019 - Do - 1526/Del/2021 - Do - 10343/2019-20 date 13.08.2021 - Do - - Do - 1527/Del/2021 - Do - 10349/2019-20 date 16.08.2021 - Do - - Do - 1528/Del/2021 - Do - 10351/2019-20 date 16.08.2021 - Do - - Do - 1529/Del/2021 - Do - 10358/2019-20 date 16.08.2021 - Do - 143(3) 2. Heard and perused the record. At the time of hearing while relying the order of ld. AO, the ld. DR apprised of the grounds raised against the order of the ld.CIT(A). It was submitted by ld. AR raising a new ground in answer to the appeal of the Revenue that in fact the order of ld. AO does not contain DIN on the body and, therefore, being non est has no consequential effect. 3. Considering the fact that the law in regard to mentioning of DIN on the body of communications issued by the Department stands settled by Hon'ble Jurisdictional High Court, in the case of Brandix Mauritius Holdings Ltd. (149 taxmann.com 238 (Delhi) 2023) the ground deserves to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that this aspect of distinction between the two has been taken note of by the Hon'ble Supreme Court in the case of CIT Chennai vs. Mohd. Meeran Shahul Hameed, 283 Taxmann 454 (2021). 4.5 The ld. DR has further relied on the judgement of the Hon'ble Jharkhand High Court in the case of Prakash Lal Khandelwal vs. CIT, 151 taxmann.com 72 (2023) to submit that the Hon'ble Jharkhand High Court has decided the issue in favour of the Revenue with regard to non-mentioning of DIN. 4.6 The ld. DR has further pointed out that presently there are seven decisions of the different High Courts on the issue of DIN. Out of seven, four decisions namely Prakash Lal Khandelwal Vs CIT (151 taxmann.com72) 2023 of Hon'ble Jharkhand HC, Chanderbhan Vs. UOI and others in Writ tax no. 829 of 2023 of Hon'ble Allahabad High Court, M/s South Cost Spices Export Pvt. Ltd. WP(C) NO.33771 of 2023 of Hon'ble Kerala High Court and Texmo Precision Casting UK Ltd. Vs. CIT(International Taxation) 138 taxmann.com 566 Madras (2022) are in favour of Revenue and three decisions namely Brandix Mauritius Holdings Ltd. (149 taxmann.com 238 ( Delhi) 2023 ) Hon'ble Delhi High Court, Tata Medical Centre of Hon'ble Kolkata H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below:- 1. It is the settled law that any legislation/ circular etc are to be interpreted in such a way that the intention and the purpose behind the legislation get fulfilled/implemented in letter and spirit. In the instant case, both the intention and the purpose i.e. prevention of manual communication and establishing audit trail are fully established. 2. The Hon'ble Supreme Court in various cases has consistently held that a procedural violations have to be corrected if no serious prejudice is caused to a person. Further the Hon'ble Supreme Court has held that the Courts should focus more on doing substantial justice then deciding the cases of procedural /technical violations. 3. The Circular no. 19/2019 talks about the issuance of communications relating to order, notice etc and which has nothing to do so with the passing of the orders like assessment order etc which is governed by provisions of Income Tax Act. It is also reiterated that 263 order was duly communicated electronically with DIN No. on the intimation letter (part of the order only) and as no manual communication was issued and accordingly the instant case is covered by para 2 of the Circular and this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. 11. As the issue of mention of DIN on intimation/cover letter sent along with the assessment order/notice etc. being a sufficient compliance of Circular no. 19/2019 and there is no further requirement of quoting DIN of the body of the order has been decided by the Hon'ble Kerala High Court and accordingly the various decisions of the Tribunal quoted by assessee's counsel are not being discussed separately because the decision of Hon'ble Kerala High Court is binding on the Tribunal even though some of the coordinate benches has decided the issue otherwise . because the decision of the Hon'ble Kerala High Court being very recent (i.e. 22.11.2023) of Hon'ble Bench, it has not been considered on any if the ITAT decisions submitted by assessee counsel. 5. We have taken into consideration the submissions of ld. DR. However, we find that all these submissions have been duly considered in the coordinate Bench decision in the case of Abhinav Chaturvedi and others, ITA No. 2486/Del/2022, A.Y. 2013-14 decided on 03.08.2023, to which one of us was in the quorum and the issue has been decided against the Revenue. The findings recorded in the case of Abhinav Chaturvedi and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are technical difficulties in generating/allotting/quoting the DIN and issuance or 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 avail able 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally and served on the assessee by users due to any exceptional reasons like technical issue in system etc. DIN was generated for every such document uploaded manually. However, there was no facility to quote the system generated DIN in the physical copy of documents. 3. Therefore, whenever user uploads a document which was issued outside ITBA system, DIN will be generated prior to uploading of such manual letter or notice or order in ITBA. User may use the same for reference and quoting as Doc. No. in physical copy. 4. Intimation letter will continue to be generated in ITBA. The same document will also be shared with e-Filing portal through e- Proceedings interface for authentication purpose. Assessee can verify the authenticity of the Letter or Notice or Order issued by Income Tax Authorities (ITA) in e-Filing portal. Such intimation along with Letter/Notice/Orders also made available in View/Download Letter/Notice/Orders screen if users wish to dispatch the same through post. Steps to be followed for DIN generation in ITBA application are as below:- i. Navigate to Generate Letter/Notice/Orders ii. Select Manual to System option screen. iii. User will enter the Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide number .... dated .. .. " 15.2 To make it crystal clear here the words 'Communication' is not used to define merely the mode of transmission of the information but the circular No 19 of 2019 makes it clear by defining it in following words "However, it has been brought to the notice of the Central Boa rd 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"). So the assessment order itself is a communication and all compliances expected have to be specific to the assessment order. 15.3 Coming back to the assessment orders, in fact as para no. 1 to 3.1 of the assessment order dated 09.08.2021 are considered they mention that notice u/s 153A of the Act was issued through ITBA portal. Subsequent notice u/s 143(2) of the Act was also issued through ITBA Portal. Thus, the notices for the purpose of assessment were issued through ITBA Portal and if thereafter the assessment was carried out manually the assessment order should have mentioned the aforesaid fact to comply with the mandate of Circular with regard to communications issued manually. 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned principle stands enunciated in a long line of judgements, including the Supreme Court's judgment rendered in Varghese v. Income Tax Officer, Ernakulam and Anr., (1981) 4 SCC 173. The relevant extracts are set forth hereafter: "12. But the construction which is commending itself to us does not rest merely on the principle of contemporanea expositio. The two circulars of the Central Board of Direct Taxes to which we have just referred are legally binding on the Revenue and this binding character attaches to the two circulars even if they be found not in accordance with the correct interpretation of sub-section (2) and they depart or deviate from such 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming to the question as to the effect of instructions issued under Section 5(8) of the Act, this Court observed in Navnitlal C. Javeri v. K.K. Sen, Appellate Assistant Commissioner, Bombay [AIR 1965 SC 1375 : (1965) 1 SCR 909 : 56 ITR 198] : "It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under Section 5(8) of the Act. This circular pointed out to all the officers that it was likely that some of the companies might have advanced loans to their shareholders as a result of genuine transactions of loans, and the idea was not to affect such 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 sub-section must be read as applicable only to cases where there is understatement of the consideration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, irrespective of assessee establishing the plea of prejudice. 10. The difference pointed out in the passing of an order and issuing communication of order is very much clarified by the Circular as the word 'communication' has been primarily used in the sense of a 'Noun', specifying what all sorts of orders, notices etc. will require DIN on the body. It is not used in the form of a 'verb' indicating the mode of transmission of information or delivery or transmitting a copy thereof as 'service of the notice' referred u/s 282 of the Act. Thus to say that there is merely an improper manner of service abs such rigour is mitigated by Section 292BB is quite misconceived. Hon'ble Delhi High Court in Brandix Mauritius Holdings Ltd. (supra) has specifically dealt with applicability of Section 292BB and has held as follows; "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." 11. Then coming to the case laws relied we find that the Hon'ble Jharkhand High Court judgement in the case of Prakash Lal Khandelwal vs. CIT (supra) has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent- assessee, based on the CBDT Circular dated 14/08/2019 (supra), is allowed in defence of the relief granted by the CIT(A) following the ratio of the judgement of the Hon'ble Bombay High Court in the case of B.R. Ramasi vs. CIT, 83 ITR 223 (Bom), where in the following discussion is relevant; "The judgment of the Tribunal in our case clearly shows that, although the assessee wanted to raise a new point as a ground of defence in the appeal, he specifically stated that he wanted to rely upon it only for the purpose of having the appeal by the department for enhancement in income-tax dismissed. But even if the assessee had not made such a statement, the above judgment shows that the assessee would be entitled to raise a new ground, provided it is a ground of law and does not necessitate any other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. If the ground succeeds, the only result would be that the appeal would fail. The acceptance of the ground would show that the entire assessment proceedings were invalid, but yet the Tribunal which hears that appeal would ha ..... 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