The section 153D approval for my search assessment carries no DIN, even though the assessment order itself does. Does that invalidate the assessment?
Yes, on this Tribunal's view. The Delhi Bench held that CBDT Circular No. 19/2019 requires a computer-generated DIN in the body of every departmental communication issued from 1 October 2019, and that a communication issued without one is invalid and deemed never to have been issued. The approval under section 153D dated 19 February 2021 carried no DIN. Because that approval is the fulcrum on which the final order rests, the Tribunal treated it as non est in law, and quashed the section 153A assessment and the section 156 demand notice built on it. It did not go into the merits.
Decided by the ITAT (Income Tax Appellate Tribunal, Delhi - Shri Pradip Kumar Kedia, Accountant Member and Shri Yogesh Kumar US, Judicial Member) on 2023-12-13, reported as ITA No. 1298/Del/2021, assessment year 2017-18; [2023] 157 taxmann.com 271 (Delhi - Trib.); [2024] 204 ITD 594 (Delhi - Trib.). It bears on section 153D, section 153A, section 292B, section 156 of the Income Tax Act 1961, in Search, Survey & Block Assessment and Assessment & Scrutiny matters.
The DIN cases up to this point were mostly about the assessment order itself. Here the assessment order carried a DIN and the assessee still won, because the internal approval that the Assessing Officer needed under section 153D did not. That moves the enquiry back one step, into the Department's own file, and makes the approval letter and the requisition for approval documents worth calling for in every search assessment. The Tribunal also refused to let section 292B cure the omission, following the Delhi High Court in Brandix Mauritius Holdings, and treated the point as a threshold objection that disposes of the appeal without any finding on the additions. If you are running a section 153D challenge, this is the order that takes the DIN argument to the approval.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee was assessed under section 153A read with section 143(3) by an order dated 19 February 2021 for assessment year 2017-18. The additions were a cash deposit of Rs. 78,69,000 brought to tax under section 68 read with section 115BBE and a disallowance of Rs. 4,32,773 of business promotion expenses. The Assessing Officer sought approval under section 153D by a requisition dated 18 February 2021 and the Additional Commissioner granted it by a letter dated 19 February 2021, the same day the assessment order was signed. Neither the requisition nor the approval quoted a DIN in its body. The notice of demand under section 156, dated 20 December 2021, also carried no DIN in its body, though the Revenue produced a separate intimation letter of the same date quoting a DIN. The assessee raised the DIN point as an additional ground, which the Tribunal admitted as a legal ground going to the root of the matter.
The Tribunal allowed the appeal on the threshold ground. It held that CBDT Circular No. 19/2019 is binding on the Department, that from 1 October 2019 no communication may be issued without a computer-generated DIN quoted in the body of it, and that the Circular itself provides that a communication issued otherwise shall be treated as invalid and deemed never to have been issued. The Revenue did not show that any of the exceptional circumstances in paragraph 3 of the Circular applied or that the prescribed procedure for them had been followed. The approval under section 153D therefore had no legal existence. Since that approval is the fulcrum for the final assessment order, the assessment passed under section 153A on the strength of it was without sanction of law, and the demand notice under section 156 fell with it. Both were quashed. The Tribunal expressly did not decide the merits of the additions, nor the separate ground that the approval was mechanical.
The Tribunal read paragraphs 2, 3 and 4 of Circular No. 19/2019 together. Paragraph 2 is a prohibition, not a direction of convenience: no communication shall issue without a DIN in the body. Paragraph 3 allows a handful of exceptions, but only in a stated format and with written approval, and the Revenue proved neither. Paragraph 4 supplies the consequence, and the consequence is not curable irregularity but non-existence. The Tribunal then rejected the Revenue's attempt to save the approval under section 292B, following the Delhi High Court in CIT v. Brandix Mauritius Holdings Ltd., where the same argument was made and rejected on the footing that a communication deemed never to have been issued is not a communication with a defect in it. It drew the same conclusion from the Calcutta High Court in PCIT v. Tata Medical Centre Trust. It treated the generation of a DIN a day later, and its appearance in a separate intimation letter, as beside the point, because the Circular requires the number to be in the body of the communication when it issues. Finally it took the step that decides the case: the approval under section 153D is not a collateral document but the statutory condition on which the Assessing Officer's power to pass the order depends. If the approval never came into legal existence, the order rests on nothing, and no question of prejudice or substantial compliance arises.
The approval under section 153D which is the fulcrum for passing final assessment order dated 19.02.2021 in question is thus apparently non-est in law in the absence of DIN.
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Handle my notice → Ask a CA on WhatsAppYes, on this Tribunal's view. The Delhi Bench held that CBDT Circular No. 19/2019 requires a computer-generated DIN in the body of every departmental communication issued from 1 October 2019, and that a communication issued without one is invalid and deemed never to have been issued. The approval under section 153D dated 19 February 2021 carried no DIN. Because that approval is the fulcrum on which the final order rests, the Tribunal treated it as non est in law, and quashed the section 153A assessment and the section 156 demand notice built on it. It did not go into the merits. This was decided by the ITAT (Income Tax Appellate Tribunal, Delhi - Shri Pradip Kumar Kedia, Accountant Member and Shri Yogesh Kumar US, Judicial Member) and bears on section 153D, section 153A, section 292B, section 156 of the Income Tax Act 1961. It is reported as ITA No. 1298/Del/2021, assessment year 2017-18; [2023] 157 taxmann.com 271 (Delhi - Trib.); [2024] 204 ITD 594 (Delhi - Trib.). The DIN cases up to this point were mostly about the assessment order itself. Here the assessment order carried a DIN and the assessee still won, because the internal approval that the Assessing Officer needed under section 153D did not. That moves the enquiry back one step, into the Department's own file, and makes the approval letter and the requisition for approval documents worth calling for in every search assessment. The Tribunal also refused to let section 292B cure the omission, following the Delhi High Court in Brandix Mauritius Holdings, and treated the point as a threshold objection that disposes of the appeal without any finding on the additions. If you are running a section 153D challenge, this is the order that takes the DIN argument to the approval. If it applies to you, the first step is this: Ask for the section 153D approval and the Assessing Officer's requisition for it under RTI or by a written request, and check whether a DIN is quoted in the body of each.
The assessee was assessed under section 153A read with section 143(3) by an order dated 19 February 2021 for assessment year 2017-18. The additions were a cash deposit of Rs. 78,69,000 brought to tax under section 68 read with section 115BBE and a disallowance of Rs. 4,32,773 of business promotion expenses. The Assessing Officer sought approval under section 153D by a requisition dated 18 February 2021 and the Additional Commissioner granted it by a letter dated 19 February 2021, the same day the assessment order was signed. Neither the requisition nor the approval quoted a DIN in its body. The notice of demand under section 156, dated 20 December 2021, also carried no DIN in its body, though the Revenue produced a separate intimation letter of the same date quoting a DIN. The assessee raised the DIN point as an additional ground, which the Tribunal admitted as a legal ground going to the root of the matter. The matter was decided on 2023-12-13 by the ITAT (Income Tax Appellate Tribunal, Delhi - Shri Pradip Kumar Kedia, Accountant Member and Shri Yogesh Kumar US, Judicial Member). On those facts the ITAT held as follows. The Tribunal allowed the appeal on the threshold ground. It held that CBDT Circular No. 19/2019 is binding on the Department, that from 1 October 2019 no communication may be issued without a computer-generated DIN quoted in the body of it, and that the Circular itself provides that a communication issued otherwise shall be treated as invalid and deemed never to have been issued. The Revenue did not show that any of the exceptional circumstances in paragraph 3 of the Circular applied or that the prescribed procedure for them had been followed. The approval under section 153D therefore had no legal existence. Since that approval is the fulcrum for the final assessment order, the assessment passed under section 153A on the strength of it was without sanction of law, and the demand notice under section 156 fell with it. Both were quashed. The Tribunal expressly did not decide the merits of the additions, nor the separate ground that the approval was mechanical.
The Tribunal read paragraphs 2, 3 and 4 of Circular No. 19/2019 together. Paragraph 2 is a prohibition, not a direction of convenience: no communication shall issue without a DIN in the body. Paragraph 3 allows a handful of exceptions, but only in a stated format and with written approval, and the Revenue proved neither. Paragraph 4 supplies the consequence, and the consequence is not curable irregularity but non-existence. The Tribunal then rejected the Revenue's attempt to save the approval under section 292B, following the Delhi High Court in CIT v. Brandix Mauritius Holdings Ltd., where the same argument was made and rejected on the footing that a communication deemed never to have been issued is not a communication with a defect in it. It drew the same conclusion from the Calcutta High Court in PCIT v. Tata Medical Centre Trust. It treated the generation of a DIN a day later, and its appearance in a separate intimation letter, as beside the point, because the Circular requires the number to be in the body of the communication when it issues. Finally it took the step that decides the case: the approval under section 153D is not a collateral document but the statutory condition on which the Assessing Officer's power to pass the order depends. If the approval never came into legal existence, the order rests on nothing, and no question of prejudice or substantial compliance arises. In the words reproduced by the source cited on this page: "The approval under section 153D which is the fulcrum for passing final assessment order dated 19.02.2021 in question is thus apparently non-est in law in the absence of DIN." The decision followed or applied CIT (International Taxation) v. Brandix Mauritius Holdings Ltd. [2023] 149 taxmann.com 238/293 Taxman 385/456 ITR 34 (Delhi); Pr. CIT v. Tata Medical Center Trust [2023] 154 taxmann.com 600/295 Taxman 501 (Cal.).
It was decided by the ITAT on 2023-12-13 and is reported as ITA No. 1298/Del/2021, assessment year 2017-18; [2023] 157 taxmann.com 271 (Delhi - Trib.); [2024] 204 ITD 594 (Delhi - Trib.). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 153D, section 153A, section 292B, section 156, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Tribunal allowed the appeal on the threshold ground. It held that CBDT Circular No. 19/2019 is binding on the Department, that from 1 October 2019 no communication may be issued without a computer-generated DIN quoted in the body of it, and that the Circular itself provides that a communication issued otherwise shall be treated as invalid and deemed never to have been issued. The Revenue did not show that any of the exceptional circumstances in paragraph 3 of the Circular applied or that the prescribed procedure for them had been followed. The approval under section 153D therefore had no legal existence. Since that approval is the fulcrum for the final assessment order, the assessment passed under section 153A on the strength of it was without sanction of law, and the demand notice under section 156 fell with it. Both were quashed. The Tribunal expressly did not decide the merits of the additions, nor the separate ground that the approval was mechanical. It arises in Search, Survey & Block Assessment and Assessment & Scrutiny matters, on section 153D, section 153A, section 292B, section 156 of the Income Tax Act 1961, and was decided by Income Tax Appellate Tribunal, Delhi - Shri Pradip Kumar Kedia, Accountant Member and Shri Yogesh Kumar US, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Take the point as an additional ground before the Tribunal if it was not raised below - it is a legal ground on the existing record. Meet the Department's section 292B answer head on by relying on the Brandix line, and be ready for the argument that a DIN generated later, or an intimation letter carrying one, cures nothing. Do not abandon your merits grounds; a threshold win leaves them undecided and they may matter if the order is reversed.
Validity check could not be completed. No appeal against this order was traced on Indian Kanoon, and no later decision doubting it was found. The wider DIN line of authority it rests on, beginning with the Delhi High Court in Brandix Mauritius Holdings, is heavily litigated and I could not establish its current position before the Supreme Court, so the proposition should not be treated as settled. Date scope: by the closing limb of s.153A(1) that section reaches only a search initiated, or a requisition made, after 31 May 2003 and on or before 31 March 2021, and s.153C is excluded by its own sub-section (3) from any search initiated on or after 1 April 2021, so this entry is authority for a search within that window and says nothing about a later one — a search initiated between 1 April 2021 and 31 August 2024 is governed instead, by force of s.152(3), by ss.147 to 151 as they stood immediately before the Finance (No. 2) Act 2024, and a search initiated on or after 1 September 2024 by the substituted Chapter XIV-B. Section 153D operates only on the assessment years referred to in clause (b) of s.153A(1) and clause (b) of s.153B(1), so it reaches no search outside that window either. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order was read in the reproduction of the full text on Indian Kanoon; the Tribunal's own site could not be reached from this machine. The input record also carried the subject 'revision', which does not fit an order about the section 153D approval, and it has been dropped. I could not establish the appellate history of this order or the present standing of the Brandix line before the Supreme Court. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Tribunal allowed the appeal on the threshold ground. It held that CBDT Circular No. 19/2019 is binding on the Department, that from 1 October 2019 no communication may be issued without a computer-generated DIN quoted in the body of it, and that the Circular itself provides that a communication issued otherwise shall be treated as invalid and deemed never to have been issued. The Revenue did not show that any of the exceptional circumstances in paragraph 3 of the Circular applied or that the prescribed procedure for them had been followed. The approval under section 153D therefore had no legal existence. Since that approval is the fulcrum for the final assessment order, the assessment passed under section 153A on the strength of it was without sanction of law, and the demand notice under section 156 fell with it. Both were quashed. The Tribunal expressly did not decide the merits of the additions, nor the separate ground that the approval was mechanical.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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