The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the order passed under Section 153A of the Income Tax Act, 1961 is invalid and deemed to have never been issued as it fails to mention the Documentation Identification Number (DIN) in its body.
The appellants are family members whose long-term capital gain (LTCG) arising on the sale of certain shares which were purchased simultaneously by each assessee in the same company and have been added back to the income of each assessee vide separate assessment orders passed under Section 153A read with Section 143 (3) of the Income Tax Act.
The appellants were issued a notice under Section 153 A of the Income Tax Act and the appellants filed their return of income wherein the same income which was initially offered to tax was declared in the returns. A copy of the Assessment Order was supplied to the assessee which did not bear any DIN number and the said orders were received by the assessees only.
The counsel for the assessee submitted that the CBDT Circular no. 19/2019 has made it mandatory that all the orders of the Department should have DIN indicated on the face of the order. It was submitted that in the cases in hand, no DIN has been quoted on the assessment orders.
In the case of CIT vs. Brandix Mauritius Holdings Ltd. 2023: DHC: 2502 it was submitted that the High Court has categorically laid down that the Circular is of binding nature on the Revenue and in the light of the same the assessment orders not bearing DIN are non-est in the eyes of law.
The Departmental Representative submitted that the very procedure of generating the DIN and communicating the same is such that as the order is uploaded the DIN is generated and communicated to the assesses.
It was submitted that since a manual assessment order was prepared outside the ITBA portal the assessment order was uploaded before the date of barring of assessment and thereafter Ld. DR has heavily relied on the judgment of the Jharkhand High Court in the case Prakash Lal Khandelwal vs. CIT WP(P) no. 1901 of 2022 Ranchi to contend that the High Court has held that generation of DIN and its communication subsequently, does not make the assessment order barred by limitation.
The Two-member bench comprising of M. Balaganesh (Accountant member) and Anubhav Sharma (Judicial member) held that when a document is prepared outside the ITBA system and uploaded manually, a DIN is required to be generated prior to uploading the document in ITBA. The instructions make it imperative that the DIN so generated has to be used for reference and quoting a document number in a physical copy.
Thus, for the purpose of Section 153A/143(3) of the Income Tax Act, the assessment can be said to be ‘made’ only when the DIN is quoted on the order before it is signed. If without first generating the DIN and before it is quoted on the order, the order is signed, the order is non-est.
The judgment cited by the Departmental Representative does not come to the rescue of Revenue. Thus, the appeal of the assessee was allowed.
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