The Kolkata Bench of the ITAT has refused the revisionary order that the Income Tax Authority is passing without quoting Document Identification No. (DIN) in the mentioned order, as required by the CBDT Circular No.19/2019, on 14.08.2019.
The Bench, consisting of Mr Sanjay Garg (Judicial Member) and Mr Girish Agrawal (Accountant Member), ruled that since the order given by the income tax authority was unable to mention DIN in its body, hence the order was “invalid and deemed to have never been issued”, mentioned beneath the specified CBDT circular.
The taxpayer is the owner of Tata Medical centre trust which is a charitable trust enrolled beneath section 12AA of the Income Tax Act, 1961. The taxpayer’s case was chosen for the investigation and passed an assessment order, showing the total income of the taxpayer is Nil. The commissioner of the income tax exemptions (CIT(E)) initiated revisionary proceedings under Section 263 of the Income Tax Act proposing to modify the assessment order and issue an order. With respect to the order passed by CIT(E) beneath Section 263, the taxpayer furnished the appeal to the ITAT.
The taxpayer Tata Medical Centre Trust submitted to ITAT that the order passed by CIT(E) beneath section 263 does not pose any document identification No. (DIN), nor was any cause filed for the non-issuance of DIN along with the mentioned order. Hence the taxpayer considered the specified order revoked CBDT circular no 19/2019, on 14.08.2019 that needs the revenue department to quote DIN in all its communications mandatorily. The taxpayer added that the purpose of the specified CBDT circular would be to maintain the audit trail which would be lost and according to the CBDT circular the orders excluding DIN are not valid and would be deemed to have never been provided.
Department of the revenue considered that the non-quoting the DIN would be the only procedural irregularity that could not direct the order passed by CIT(E) beneath section 263 as invalid.
The revenue department added that there are some exceptional situations specified in the mentioned CBDT circular No.19/2019 towards quoting the DIN; and that there would be some technological and additional issues seen by the revenue department in generating, allotting, and DIN quoting that could not incur the lawful proceedings made and finished by the income tax authorities as invalid.
ITAT sees that CBDT Circle No. 19/2009, on 14.08.2019, gives that no communication will be provided through any income tax authority concerned to the assessment appeals, orders, exemptions, penalty, prosecution, others to the taxpayer or any additional individual on or post-dated 1/10/2019, unless a computer generated DIN would be allotted and would be duly quoted in the body of this communication.
ITAT held that according to the circular, all the communications specified would either to get generated and issued electronically with DIN or in some exceptional situations the communications might be provided manually without a DIN given the requisite conditions would be satisfied. ITAT added that failing the same communication would be treated as “invalid and shall be deemed to have never been issued” given in the said circular.
The ITAT sees that the order passed beneath Section 263 of the Income Tax Act was issued manually and did not absorb the signature of the authority who passes the order.
ITAT sess that there was no reference in the mentioned order to the concern that the order was manually issued without a DIN to which the written approval of the Chief Commissioner or the Director General of Income Tax was needed to be brought off the said CBDT Circular.
ITAT ruled that for the specified CBDT circular these were directed to be the order as invalid and deemed to never been provided.
“From the perusal of the above circular, we note that CBDT came out with this circular to mitigate the issues/instances where certain notices, orders, summons, letters and other correspondences which have been issued manually do not have a proper audit trail of their communication despite various e-governance initiatives and computerization of its work. Therefore, in order to prevent such instances and to maintain a proper audit trail of all the communications, CBDT directed 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 01.10.2019 unless a computer generated DIN has been allotted and is duly quoted in the body of such communication.”
Thus the ITAT ruled that the mentioned order which the CIT(E) has passed losses to specify the DIN in its body and is unable to stick to the fact that it has never been issued.
The ITAT hence permitted the petition of the taxpayer.
