The Kolkata Income Tax Appellate Tribunal (ITAT) has declared the revisionary order passed by the CIT(E) and deemed to have never been issued as it fails to mention Document Identification Number (DIN) in its body by adhering to the CBDT circular.

The two-member bench of Sanjay Garg (Judicial Member) and Girish Aggarwal (Accountant Member) observed that there was no reference to the fact that the order was issued manually without a DIN for which the written approval of the 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 the CBDT circular, the lapse renders the order invalid and deemed to have never been issued.

The appellant/assessee is a charitable trust registered under section 12AA of the Income Tax Act. The assessee trust operates under the Tata Cancer Hospital, looking after the treatment of cancer patients. The objectives of the trust are to promote prevention, early diagnosis, treatment, rehabilitation, and research for cancer patients.

The assessee filed its return of income on 29.09.2016 reporting total income for Rs. Nil. The assessee was assessed income tax by the Assistant Commissioner of Income-tax, Circle-1(1) (Exempt), Kolkata. The case of the assessee was selected for scrutiny for which statutory notices were issued and compiled by the assessee.

The assessment was completed for which the order was passed under section 143(3) of the Income Tax Act, determining total income at Rs. NIL. Subsequently, CIT(E), Kolkata initiated revisionary proceedings proposing to revise the assessment order for which a show cause notice was issued to the assessee and placed in the paper book. The show cause notice required the assessee to submit its reply within six days. The assessee filed its reply and the CIT(E) passed the order under section 263 by rejecting the contentions of the assessee. The assessee filed the appeal before the Tribunal.

The assessee submitted that for initiation of proceedings under section 263, a show cause notice was issued, which came to the knowledge of the assessee only on 27.03.2021 and for which the reply was to be submitted on 30.03.2021. The assessee filed its reply and the order was passed on the last date of the time barring period with a direction to the AO to make additions under different heads. The order passed under section 263 did not contain any DIN nor any reason for the non-issuance of a DIN along with the order.

The assessee submitted that the whole objective of the said CBDT Circular requiring a mandatory quoting of DIN in all the communications of the department is to maintain the audit trail which otherwise gets lost. In order to tackle the ambiguity, the circular renders orders without a DIN as "invalid or deemed to have never been issued".

The ITAT held that the guidelines issued by the Board in exercise of powers in terms of section 119 of the Income Tax Act, relaxing the rigours of the law, are binding on all the officers responsible for implementation. Therefore, the officers are bound to follow and observe any orders, instructions, and directions of the Board.

Case Title: Tata Medical Centre Trust Versus Commissioner of Income- tax, (Exemption)

Citation: ITA No.238/Kol/2021

Dated: 18.07.2022

Counsel For Appellant: CA Akshay Ringasia & Advocate Tarak Nath Jaiswal

Counsel For Respondent: D.R. Deb Kr. Sonowal

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