Facts of the Case

The assessee, Gajendra Singh, filed appeals before the Income Tax Appellate Tribunal (ITAT), Delhi Bench, against orders passed by the Commissioner of Income Tax (Appeals) relating to Assessment Years 2012-13, 2013-14, and 2014-15. The Revenue also filed a cross-appeal for Assessment Year 2014-15.

The Assessing Officer (AO) had passed assessment orders dated 31.12.2019 under Section 143(3) read with Section 153C of the Income-tax Act, 1961.

The assessee raised an additional legal ground before the Tribunal challenging the validity of the assessment orders, contending that the orders were issued without mentioning a Document Identification Number (DIN), which is mandatory as per CBDT Circular No. 19/2019 dated 14.08.2019 issued under Section 119 of the Income-tax Act.

Since the issue went to the root of jurisdiction, the Tribunal admitted the additional ground. 

Issues Involved

  1. Whether an assessment order issued without mentioning a DIN in the body of the order is valid in law?
  2. Whether failure to comply with CBDT Circular No. 19/2019 renders the assessment order invalid and void ab initio?
  3. Whether such defect can be cured through Section 292B of the Income-tax Act? 

Petitioner’s Arguments (Assessee)

The assessee submitted the following:

  • The assessment orders passed under Section 143(3) read with Section 153C did not contain a DIN, which is mandatory after 01.10.2019 as per CBDT Circular No. 19/2019 issued under Section 119.
  • The circular clearly states that no communication shall be issued by the Income-tax Department without a computer-generated DIN.
  • If a communication is issued without DIN and does not fall under the specified exceptions, such communication shall be treated as invalid and deemed never to have been issued.
  • The defect goes to the root of jurisdiction, making the assessment order void.
  • Reliance was placed on various judicial precedents including:
    • CIT (International Taxation) v. Brandix Mauritius Holdings Ltd.
    • CIT v. Sinhgad Technical Education Society (SC)
    • NTPC Ltd. v. CIT (SC)

 Respondent’s Arguments (Revenue)

The Revenue contended that:

  • The CBDT Circular is primarily for administrative control and does not automatically confer a legal right on the assessee.
  • Non-mention of DIN in the body of the order may be a procedural lapse and should not invalidate the entire proceedings.
  • Even if DIN is not mentioned in the order, it may have been generated subsequently.
  • The defect should be considered a technical error and saved under Section 292B of the Income-tax Act.
  • Determination of whether DIN existed or was later generated requires factual verification and should not lead to automatic invalidation of assessment orders. 

Court Findings

The ITAT examined CBDT Circular No. 19/2019 dated 14.08.2019, which mandates that:

  • Every communication issued by the Income-tax Department must contain a DIN.
  • Manual communication without DIN can only be issued in exceptional circumstances with prior approval of the competent authority.
  • Such manual communication must clearly mention:
    • The reason for not generating DIN
    • The approval details of the competent authority.
  • Any communication issued without complying with these requirements shall be treated as invalid and deemed never to have been issued.

The Tribunal observed that:

  • The assessment orders did not contain DIN.
  • The orders did not record any reason for issuing manual communication without DIN.
  • No approval details of the Chief Commissioner or Director General were mentioned.

Therefore, the order was not in conformity with CBDT Circular No. 19/2019.

The Tribunal also relied on the decision of the Delhi High Court in CIT v. Brandix Mauritius Holdings Ltd. (2023), which held that communications issued without DIN are non-est in law.

Court Order / Final Decision

The ITAT held that:

  • The assessment orders passed by the Assessing Officer without DIN were invalid.
  • As per paragraph 4 of CBDT Circular No. 19/2019, such communications are deemed never to have been issued.
  • Consequently, the impugned assessment orders were quashed.

 Important Clarification

The Tribunal clarified that:

  • CBDT Circulars issued under Section 119 of the Income-tax Act are binding on the Income-tax authorities.
  • Non-compliance with the mandatory requirement of quoting DIN cannot be treated as a mere procedural irregularity.
  • Section 292B cannot cure such defect, because the circular itself declares non-compliant communications invalid.

Link to download the order – https://itat.gov.in/public/files/upload/1703572884-1556%20and%20%203%20ors-Gajendra%20Singh.pdf

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