The Income Tax Appellate Tribunal (ITAT), Pune bench has ruled that according to the Central Board of Direct Tax Circular 2019, passing an assessment order without Document Identification Number (DIN) is a violation of the said Circular. Thus, the order was declared void ab initio by the bench.
The appeal, opposing the assessment order, was filed by Kimberly Clark India Pvt. Ltd. The Dy Commissioner of Income Tax Circle passed the order of assessment for the assessment year 2015-16.
In view of Circular No. 19/2019 issued by the CBDT, the assessee questioned the validity of the impugned order.
The revenue counsel argued that although the challenged assessment order includes the DCR Number, therefore corresponding Document Identification Number should have been issued in accordance with the CBDT Circular. However, when interacting with the assessee, this was still to be cited in the body of the order.
The tribunal concluded that the CBDT, exercising its authority under Section 119 of the Income Tax Act, vide Circular No. 29/2019 dated 14/08/2019 to eliminate the manual practice of issuing notices, orders, summons, and letters. The purpose was to maintain an accurate audit trail of all communications.
The CBDT mandated the income tax authority to generate, allocate, and communicate a computer-generated DIN for any assessments, appeals, orders, statutory requirements, exemptions, inquiries, investigations, verifications of information, penalties, prosecutions, rectifications, approvals, and so which came into effect from 01/10/2019.
Para 2 of the CBDT Circular 2019 specifies compliance with DIN, while para 3 allows five exceptional circumstances where manual communication is permitted without initially complying with the DIN requirement. However, regularisation within 15 working days of manual issuance is required.
Furthermore, the decision of the Delhi High Court in the case of ‘CIT Vs Brandix Mauritius Holdings Ltd.’ was referenced. The court held that any communication related to assessments, appeals, orders, etc., as mentioned in paragraph 2 of the 2019 circular, albeit without the DIN, has no legal standing in law, considering the provisions of paragraph 4 of the 2019 circular.
It was observed by the two-member bench comprising Rajpal Yadav, Vice-President and Rajesh Kumar, Accountant Member that the assessment order supports no DIN in the body of the assessment. Therefore, the order was communicated in violation of Para-2 of the CBDT Circular collectively.
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Moreover, the Revenue was unable to provide any evidence to explain that the assessee’s case falls under any of the five exceptional circumstances mentioned in Para 3. Additionally, they failed to present any supporting documents that prove the regularisation of the initial manual issuance, as stated in Para 5.
Prashant Gadekar and Percy Pardivalla were the counsel for the Revenue and for the assessee, respectively.
| Case Title | Kimberly Clark India Pvt. Ltd. |
| Citation | ITA No. 1950/PUN/2019 |
| Date | 12.05.2023 |
| Assessee by | Shri Percy Pardiwalla & Shri Hiten Chande |
| Revenue by | Shri Prashant Gadekar |
| Pune ITAT | Read Order |
