The subsequent generation of DIN would not change the illegality of the order –ITAT Indore

Facts of the case
1. That the order u/s. 154, dated 10.10.2019 was initially issued in manual mode on 10.10.2019, without generating a Document Identification Number (DIN), in contravention of the CBDT Circular No.19 of 2019 dated 14.8.2019.

2. That in order to regularize the Manual Order u/s. 154 dated 10.10.2019, the Ld. AO generated a DIN, through the ‘Intimation Letter’ dated 14.10.2019.

3. Subsequently the DIN, initially generated by Intimation letter dated 14.10.19 was manually-handwritten to the manual order u/s. 154 dated 10.10.19.

Arguments Advanced on Behalf of the assessee:

1. That the impugned rectification order dated 10.10.2019 passed u/s 154 of the Act is invalid for want of Documents Identification No. (DIN).

2. The order passed u/s 154 was issued originally without any DIN, the AO subsequently generated the DIN on 14.10.2019

3. The subsequent generation of DIN without following the procedure prescribed in CBDT circular No.19 of 2019 dated 14th August2019 would not remove the illegality of the order.

Arguments Advanced on Behalf of the Revenue:

1. The AO has mentioned in the order passed u/s 154 that it is a case of no PAN and therefore, this case falls in the exceptions as provided in circular No.19 of 2019

2. The AO has generated the DIN on 14th October 2019. that once the AO has generated the DIN and case of the assesse falls in the exception as provided in para 3(iv) of the circular then the conditions provided in the circular are satisfied.

3. Therefore the order is very much valid.

Observations of the Hon. ITAT
1. At the time of passing the impugned order there was no DIN.

2. Vide circular no.19/20019 dated 14.08.2019 the CBDT decided that no communication shall be issued by any income tax authorities relating to assessment, penalty, statutory or otherwise etc. unless the computer generated documents identification no. (DIN) has been allotted and is duly quoted in the body of such communication. Any communication which is not inconformity with DIN shall be treated as invalid and shall be deemed to have never been issued.

3. Accordingly when the AO has not followed the procedure as provided in the circular no.19 of 2019 in para 2 then even if the present case falls in the exceptions under para 3(v) being no PAN case the order passed by the AO u/s 154 is invalid.

4. The subsequent generation of DIN by the AO on 14th October 2019 would not change the illegality of the order when the procedure provided under para 2 of the circular is not followed by the AO.

5. Hence following the earlier decision of this tribunal as well as the decision of the Hon’ble Delhi High Court in case of CIT vs. Brandix Mauritius Holdings Ltd.,(supra) the impugned order passed by the AO u/s 154 of the Act is invalid and the same is quashed.