ITAT set-asides Sec. 263 revision as CIT manually issued order without DIN

Case Details: Tata Medical Centre Trust v. CIT (Exemption) - [2022] 140 taxmann.com 431 (Kolkata-Trib.)

Judiciary and Counsel Details

• • Sanjay Garg, Judicial Member & Girish Agrawal, Accountant Member
  • Akshay Ringasia, CA & Tarak Nath Jaiswal, Advs. for the Appellant
  • Deb Kr. Sonowal CIT, DR for the Respondent.

Facts of the Case

The instant appeal was filed by the assessee against the order passed by CIT(E) under section 263. Assessee contended that the order passed under section 263 didn’t contain any Document Identification No. (DIN) nor any reason for non-issuance of DIN along with the impugned order. CBDT relied upon CBDT Circular No. 19/2019, dated 14.08.2019.

The CIT(E) opposed the submission made by assessee on grounds that this was a mere procedural irregularity that cannot render the order invalid.

ITAT Held

The Tribunal held that to maintain proper audit trail of all the communications, CBDT issues circular to direct that no communication shall be issued unless a computer-generated DIN has been allotted and is duly quoted in the body of such communication.

Further, Para 3 of said circular provides for certain exceptional circumstances when the communication is issued manually. Manually issued communications should contain the fact that the said communication is issued manually without a DIN and the date of obtaining the written approval of the Chief Commissioner/Director General of Income-tax for the issue of said manual communication in the prescribed format.

It was an undisputed fact that the order under section 263 had been issued manually which did not bear the signature of the authority passing the order. Further, there was no reference to the fact of this order was issued manually without a DIN for which the written approval of Chief Commissioner/Director General of Income-tax was required to be obtained in the prescribed format in terms of the CBDT circular.

In terms of para 4 of the CBDT circular, such a lapse renders this impugned order as invalid and deemed to have never been issued.

It is also important to note the binding nature of CBDT circular on the Income-tax Authorities for which gainful guidance is taken from the decision of Hon’ble Supreme Court in the case of CIT v. Hero Cycles [1997] 228 ITR 463 (SC). The Apex Court held that circulars bind the ITO but will not bind the appellate authority or the Tribunal or the Court or even the assessee.

Considering the CBDT’s circular and the judicial precedents, it was held that the order passed by the CIT(E) was invalid and deemed to have never been issued as it fails to mention DIN in its body by adhering to the CBDT’s circular.