Facts of the Case

The assessee, Santosh Khanna, filed an appeal before the Income Tax Appellate Tribunal against the order passed by the Commissioner of Income Tax (Appeals) for Assessment Year 2017-18.

During the course of proceedings, the assessee raised an additional legal ground challenging the validity of the assessment order issued by the Assessing Officer. The assessee contended that the assessment order dated 24.12.2019 did not contain a Document Identification Number (DIN) in its body.

The assessee argued that after the issuance of CBDT Circular No. 19/2019, every communication issued by the Income Tax Department must compulsorily contain a computer-generated DIN. The absence of DIN renders the communication invalid unless it falls within specific exceptions provided in the circular.

Issues Involved

  1. Whether an assessment order issued without quoting a Document Identification Number (DIN) is valid under law.
  2. Whether failure to comply with CBDT Circular No. 19/2019 makes the assessment order void and non-est in law. 

Petitioner’s Arguments (Assessee)

The assessee contended the following:

  • The assessment order did not contain a DIN, which is mandatory under CBDT Circular No. 19/2019 dated 14.08.2019.
  • The circular clearly mandates that no communication shall be issued by any income-tax authority after 01.10.2019 without a computer-generated DIN.
  • If communication is issued manually due to exceptional circumstances, the order must specifically mention reasons and approval of the competent authority.
  • In the present case, the assessment order neither contained DIN nor stated reasons for manual issuance, making the order invalid and void ab initio. 

Respondent’s Arguments (Revenue)

The Revenue relied upon the orders of the lower authorities and attempted to justify the validity of the assessment proceedings.

However, the Revenue could not satisfactorily demonstrate that the case fell within any of the exceptional circumstances provided under the CBDT Circular that would permit issuance of communication without DIN. 

Court Findings / Order

The Income Tax Appellate Tribunal observed that:

  • CBDT Circular No. 19/2019 clearly mandates that all communications, including assessment orders, must contain a DIN.
  • The circular also provides limited exceptional circumstances where manual communication without DIN may be issued, but such communication must clearly state the reason and approval of higher authority.
  • In the present case, the assessment order did not contain a DIN and also did not mention any reason for manual issuance.

The Tribunal relied upon the decision of the Delhi High Court in CIT v. Brandix Mauritius Holdings Ltd. (2023) which held that communication without DIN is invalid and deemed to have never been issued.

Important Clarification

The Tribunal clarified that:

  • CBDT Circular issued under Section 119 has statutory force and is binding on the Income Tax Department.
  • Any communication issued without complying with the requirements of the circular shall be treated as invalid and deemed never to have been issued.
  • Subsequent generation or communication of DIN cannot cure the defect if the DIN was not mentioned in the original order.

Link to download the order - https://itat.gov.in/public/files/upload/1703745923-1740-2022-Santosh%20Khanna.pdf

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