THE PR. COMMISSIONER OF INCOME TAX, vs M/S UNISYS INDIA PVT LTD.,

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ITA No. 55 of 2024
C/W ITA No. 216 of 2023


Reserved on : 05.06.2026
Pronounced on : 07.07.2026
R



IN THE HIGH COURT OF KARNATAKA AT BENGALURU


TH
DATED THIS THE 07 DAY OF JULY, 2026

PRESENT


THE HON'BLE MR. JUSTICE S.G.PANDIT

AND

THE HON'BLE MR. JUSTICE K. V. ARAVIND


INCOME TAX APPEAL No. 55 OF 2024

C/W

INCOME TAX APPEAL No. 216 OF 2023



IN ITA No. 55/2024

BETWEEN:

1. THE PR. COMMISSIONER OF INCOME TAX,
TH
5 FLOOR, BMTC BUILDING,
80 FEET ROAD,
KORAMANGALA ,
BENGALURU 560 095.

2. THE ASST. COMMISSIONER OF INCOME TAX
CIRCLE 7(1)(1),
PRESENT ADDRESS,
DCIT, CIRCLE 7(1)(1)
ND
2 FLOOR, BMTC BUILDING,
80 FEET ROAD, KORAMANGALA,
BENGALURU 560095.
…APPELLANTS





Digitally
signed by
VINUTHA B S
Location: High
Court of
Karnataka

(BY SRI K. ARVIND KAMATH, ASG A/W
SRI E.I. SANMATHI, SENIOR STANDING COUNSEL AND
SRI NIRMAL MATHEW, JUNIOR STANDING COUNSEL)

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C/W ITA No. 216 of 2023


AND:

1. M/S UNISYS INDIA PVT. LTD.,
TH TH
4 TO 11 FLOORS, BLOCK-3
WING-B, SURVEY No.31/1,
RGA TECH PARK, SEZ VARTHUR HOBLI,
SARJAPUR ROAD,
CHIKKAKANNALLI VILLAGE,
BENGALURU 560 035.
KARNATAKA.
PAN: AAACU 1502G.
…RESPONDENT
(BY SRI T. SURYANARAYANA, SENIOR ADVOCATE FOR
SMT. TANMAYEE RAJKUMAR, ADVOCATE)
THIS ITA / INCOME TAX APPEAL UNDER SECTION 260-A
OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED
31/05/2023 PASSED IN IT(TP)A No.851/BANG/2022, FOR THE
ASSESSMENT YEAR 2017-2018, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. ALLOW
THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE
INCOME TAX APPELLATE TRIBUNAL, BENGLAURU IN IT(TP)A
No.851/BANG/2022 DATED 31/05/2023 FOR ASSESSMENT
YEAR 2017-2018 ANNEXURE-A AND CONFIRM THE ORDER OF
THE DRP CONFIRMING THE ORDER PASSED BY THE DEPUTY
COMMISSIONER OF INCOME TAX, CIRCLE-7(1)(1),
BENGALURU.

IN ITA No. 216/2023

BETWEEN:

1. THE PR. COMMISSIONER OF INCOME TAX,
RD
CENTRAL, 3 FLOOR,
C. R. BUILDING,
QUEENS ROAD,
BENGALURU-560001.

2. THE PR. COMMISSIONER OF INCOME TAX,
CENTRAL,
PRESENT ADDRESS
DCIT, CENTRAL CIRCLE-1(1)
RD
3 FLOOR, C. R. BUILDING

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C/W ITA No. 216 of 2023


QUEENS ROAD,
BENGALURU-560001.
...APPELLANTS
(BY SRI K. ARVIND KAMATH, ASG A/W
SRI Y.V. RAVIRAJ, SENIOR STANDING COUNSEL AND
SRI DILIP M., JUNIOR STANDING COUNSEL)

AND:

1. SHRI H. K. SURESH,
ST
No.553/1, 1 A CROSS,
RD TH
3 STAGE, 4 BLOCK,
BASAVESHWARANAGAR,
BENGALURU-560040,
PAN-AGSPS8913N.
...RESPONDENT
(BY SRI HEMANTH VENKATRAY PAI, ADVOCATE)

THIS ITA / INCOME TAX APPEAL UNDER SECTION 260-A
OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. ALLOW
THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE
INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No.
625/BANG/2021 DATED 06.12.2022 FOR ASSESSMENT YEAR
2011-2012 ANNEXURE- C AND CONFIRM THE ORDER OF THE
UNDER SECTION 263 CONFIRMING THE ORDER PASSED BY
THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL
CIRCLE-1(1), BENGALURU.

THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS
K.V. ARAVIND J.
DAY, , DELIVERED THE FOLLOWING:-

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND

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C/W ITA No. 216 of 2023


C.A.V. JUDGMENT

(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

Heard Sri K. Arvind Kamath, learned Additional Solicitor
General of India, along with Sri E.I. Sanmathi, learned Senior
Standing Counsel, and Sri Nirmal Mathew, learned Junior
Standing Counsel, for the appellants-Revenue, and
Sri T. Suryanarayana, learned Senior Counsel, for
Smt. Tanmayee Rajkumar, learned counsel for the respondent-
Assessee in ITA No.55/2024. Also heard Sri K. Arvind Kamath,
learned Additional Solicitor General of India, along with
Sri Y.V. Raviraj, learned Senior Standing Counsel, and
Sri M. Dilip, learned Junior Standing Counsel, for the
appellants-Revenue, and Sri Hemanth Venkatray Pai, learned
counsel for the respondent-Assessee in ITA No.216/2023.

2. Since these appeals involve identical questions of law,
they were heard together and are being disposed of by this
common judgment.

3. This Court, by order dated 31.01.2026, admitted ITA
No.55/2024 to consider the following substantial question of
law:

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“Whether the Tribunal was right in law and fact in
quashing the assessment order when the DIN was
duly generated by DRP while passing the direction
and when the final assessment order was also
passed after generation of DIN?”


3.1 This Court, by order dated 22.05.2023, admitted ITA
No.216/2023 to consider the following substantial questions of
law:
“ 1. Whether the Tribunal was right in law holding that
order passed under section 263 of the Act was not
having a Document Identification Number (DIN)
even when the order was uploaded through ITBA.
Further Tribunal erred in holding that order is
invalid as per Circular No.19 of 2019 dated
14/8/2019 without considering the intention behind
said circular which was never violated while passing
the order under section 263 of the Act?

2. Whether on the facts and circumstances of the case
and in law, the Tribunal’s order can be said as
perverse in nature quashing the order passed
under section 263 of the Act without considering
the merits of the case and as such order passed by
the Tribunal is perverse in nature?”


FACTS

4. In ITA No.55/2024, the respondent-Assessee is engaged
in the business of trading and installation of information
technology-related products and services, software
development, and business process outsourcing. The Assessee
filed its return of income for the assessment year 2017–18 on

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30.11.2017. The case was selected for scrutiny, and a notice
under Section 143(2) of the Income-tax Act, 1961 (for short,
“the Act”) was issued. Thereafter, the matter was referred to
the Transfer Pricing Officer (TPO) for determination of the arm’s
length price. The TPO passed an order under Section 92CA(3)
of the Act.

4.1 Based on the arm’s length price determined by the TPO,
the Assessing Officer passed a draft assessment order under
Section 144C of the Act on 15.09.2021. Aggrieved thereby, the
Assessee filed objections before the Dispute Resolution Panel
(DRP). The DRP, by its order dated 29.06.2022, issued
directions to the Assessing Officer. Pursuant to the said
directions, the Assessing Officer finalized the assessment by
order dated 18.07.2022.

4.2 The Assessee thereafter preferred an appeal before the
Tribunal challenging the directions issued by the DRP, the
consequential final assessment order, and the determination of
the arm’s length price by the TPO. By the impugned order
dated 31.05.2023, the Tribunal set aside the order of the DRP,
holding that the same was passed in contravention of Circular
No.19/2019 dated 14.08.2019 issued by the Central Board of

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Direct Taxes. Aggrieved thereby, the Revenue has preferred the
present appeal.

5. In ITA No.216/2023, the respondent-Assessee, a
contractor, filed its return of income for the assessment year
2011–12. The return was selected for scrutiny, and an
assessment order came to be passed under Section 143(3) of
the Income-tax Act, 1961 (for short, “the Act”) on 07.02.2014.

5.1 Subsequently, the Principal Commissioner of Income Tax
invoked the revisional jurisdiction under Section 263 of the Act.
In exercise of the said power, and after affording an
opportunity of hearing to the Assessee, the Revisional
Authority, by order dated 15.03.2021, set aside the assessment
order on the ground that it was erroneous and prejudicial to the
interests of the Revenue, and directed the Assessing Officer to
re-do the assessment after providing adequate opportunity to
the Assessee.

5.2 Aggrieved by the revisional order, the Assessee preferred
an appeal before the Tribunal. By the impugned order dated
06.12.2022, the Tribunal set aside the order passed under
Section 263 of the Act, holding that the same was in
contravention of Circular No.19/2019 dated 14.08.2019.

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Aggrieved thereby, the Revenue has preferred the present
appeal.

SUBMISSIONS OF SRI K. ARVIND KAMATH, LEARNED
ADDITIONAL SOLICITOR GENERAL OF INDIA (ASG),
APPEARING FOR THE APPELLANTS-REVENUE :

IN ITA NO.55/2024

6. Learned ASG submits that the order of the DRP was
uploaded in the Income Tax Business Application (ITBA) for
generation of a Document Identification Number (DIN). At that
stage, the order of the DRP, though not bearing a DIN, was
also communicated to the Assessee. Upon generation of the
DIN, the order of the DRP bearing the DIN was communicated
to the Assessee through a separate communication dated
30.06.2022.

6.1 It is contended that such a procedure is permissible under
Circular No.19/2019 dated 14.08.2019 and the subsequent
instructions issued by the Directorate of Income Tax (Systems).
Learned ASG would therefore submit that there is substantial
compliance with the requirements of Circular No.19/2019 dated
14.08.2019.

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6.2 In support of the said contention, reliance is placed on
the communication dated 30.06.2022 addressed to the
Assessee, which bears a DIN in respect of the order of the DRP
dated 29.06.2022 passed under Section 144C(5) of the Act, as
well as a separate DIN assigned to the communication dated
30.06.2022 itself.

6.3 Learned ASG further submits that, having regard to the
object of mandating that the communication contain a DIN and
the procedure implemented as permitted by the competent
authority, there is no non-compliance with Circular No.19/2019
dated 14.08.2019. It is submitted that the Tribunal, without
considering the above aspects, erroneously set aside the orders
on the ground of non-compliance with Circular No.19/2019
dated 14.08.2019.

6.4 Learned ASG also invited the attention of this Court to the
affidavit dated 04.09.2024 filed by the Deputy Commissioner of
Income Tax, Central Circle-1(3), Bengaluru, explaining the
procedure and the manner in which the DIN can be generated
and communicated.

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C/W ITA No. 216 of 2023


IN ITA NO.216/2023

7. Learned ASG submits that the order dated 15.03.2021
passed under Section 263 of the Act was communicated to the
Assessee without a DIN. On the same day, a DIN was
generated and communicated by intimation letter dated
15.03.2021, which contains the DIN pertaining to the order
passed under Section 263 of the Act dated 15.03.2021, as well
as a DIN for the intimation letter dated 15.03.2021 itself.

7.1 It is further submitted that the requirement is the
communication of the DIN so as to authenticate the
correspondence made. Such correspondence may include a
notice, order, summons, assessment order, or an appellate
order passed by the Assessing Officer. Though Circular
No.19/2019 stipulates that the DIN should be quoted in the
body of such communication, the subsequent circulars /
notifications / communications permit communication of the
DIN through a separate communication/letter.

7.2 It is submitted that the expression “body of such
communication” occurring in Circular No.19/2019 cannot be
construed as the body of the order itself; rather, it may refer to

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the body of any communication. In the present case, such
communication is the intimation letter dated 15.03.2021.

7.3 Learned ASG further submits that the Finance Act, 2026
has inserted Section 292BA. In view of the said amendment,
any mistake, defect, or omission in quoting the computer-
generated DIN is treated as a curable defect, and an order
issued without a DIN would not stand invalidated.

SUBMISSIONS OF SRI T. SURYANARAYANA, LEARNED SENIOR
COUNSEL APPEARING FOR THE RESPONDENT-ASSESSEE IN
ITA NO.55/2024:

8. Learned Senior Counsel submits that the order of the DRP
was communicated without a DIN. The subsequent generation
of a DIN and communication of the same, according to him,
does not constitute compliance with Circular No.19/2019. It is
submitted that if any order is to be communicated without a
DIN, prior written approval of the Chief Commissioner or
Director General of Income Tax is necessary. In the present
case, no such approval was obtained. According to the learned
Senior Counsel, subsequent generation and communication of a
DIN is not a procedure contemplated under Circular
No.19/2019.

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8.1 It is further submitted that an order communicated to the
Assessee without a DIN is, by operation of the Circular, invalid
and is deemed never to have been issued. Without prejudice to
the said contention, learned Senior Counsel submits that
subsequent communication of a DIN through a separate
letter/communication does not amount to compliance with the
mandatory requirement of the Circular.

8.2 It is also submitted that the amendment introducing
Section 292BA by the Finance Act, 2026, would neither cure the
defect nor validate the order. Hence, the amendment is of no
assistance to the Revenue. Learned Senior Counsel further
submits that, at the highest, the amendment by insertion of
Section 292BA may save an assessment order and not an order
passed by the DRP.

8.3 It is further contended that, having regard to the
language employed in Circular No.19/2019, the subsequent
generation and communication of a DIN does not establish any
nexus with the document that was uploaded without a DIN. The
object of a DIN is to authenticate the document. In the absence
of a discernible nexus between the DIN and the document, the

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purpose of the Circular cannot be said to have been achieved
nor can there be compliance with its requirements.

8.4 It is lastly submitted that even the DIN said to have been
communicated, as well as the manual entry of the DIN on the
order of the DRP, is incorrect and, therefore, there is no
compliance with the Circular.

SUBMISSIONS OF SRI HEMANTH VENKATRAY PAI, LEARNED
COUNSEL APPEARING FOR THE RESPONDENT-ASSESSEE IN
ITA NO.216/2023:

9. Learned counsel for the respondent-Assessee submits
that the order passed under Section 263 of the Act was
communicated without a DIN. The subsequent generation and
communication of a DIN, according to him, does not amount to
compliance with the mandatory requirements of Circular
No.19/2019.

9.1 It is submitted that the Revenue has manually entered
the DIN in the order passed under Section 263 of the Act, and
the same has been produced before this Court. Learned counsel
further submits that there was no second communication of the
order passed under Section 263 of the Act bearing a DIN, as

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claimed by the Revenue. According to the respondent, only one
order under Section 263 of the Act, which did not contain a
DIN, was received.

9.2 In the above circumstances, learned counsel submits that
the findings recorded by the Tribunal are justified. It is also
submitted that mentioning the DIN in the order is mandatory.

ANALYSIS

10. We have considered the submissions made by learned
counsels appearing for the respective parties.

11. In both cases, it is undisputed that the order of the DRP
and the order passed under Section 263 of the Act were initially
communicated to the Assessees without a DIN. The DINs were
generated after the orders were uploaded in the system. The
DINs generated in respect of these orders were thereafter
communicated through separate intimation letters, which
themselves bear separate DINs.

12. In ITA No.55/2024, the intimation letter dated
30.06.2022 communicates the DIN pertaining to the order
dated 29.06.2022 passed under Section 144C (5) of the Act.
Similarly, in ITA No.216/2023, the intimation letter dated

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15.03.2021 communicates the DIN pertaining to the order
dated 15.03.2021 passed under Section 263 of the Act. The
said communications themselves bear separate DINs. The
issuance of these communications is not seriously disputed.

13. Both the orders produced on record contain manual
mention of the DIN. It is the specific case of the Revenue that,
along with the communications, the orders containing the
manually entered DINs were also communicated to the
respective Assessees.

14. Learned counsel for the respondent-Assessee in ITA
No.216/2023 made an unsuccessful attempt to contend that
the DIN was never manually entered in the order passed under
Section 263 of the Act and that no such order was
communicated to the respondent. We are unable to accept the
said submission.

15. By order dated 11.11.2024, this Court called for the
records of the Tribunal. The appeal before the Tribunal was
filed by the Assessee along with Form No.36, grounds of
appeal, revised grounds of appeal, the order passed under
Section 263 of the Act, the assessment order dated 31.12.2018
passed under Section 147 read with Section 144 of the Act, and

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the challan evidencing payment of court fee. The order dated
15.03.2021 passed under Section 263 of the Act, forming part
of the Tribunal record produced by the respondent-Assessee,
contains a manually entered DIN at Sl. No.6 on page No.20.

16. Learned counsel for the respondent-Assessee relied upon
a letter dated 01.12.2022 enclosing notarized copies of the
intimation letter dated 15.03.2021 and the order passed under
Section 263 of the Act to contend that the second
communication of the order under Section 263 of the Act did
not contain the DIN. However, if the order passed under
Section 263 of the Act containing the manually entered DIN
had never been communicated, this Court is unable to
comprehend how the very same order dated 15.03.2021,
containing the manually entered DIN at Sl. No.6 on page
No.20, came to be enclosed by the Assessee himself along with
Form No.36 before the Tribunal.

17. During the course of hearing, when the said order
forming part of the Tribunal record was confronted to the
learned counsel, it was suggested that the document at page
No.20 had been subsequently inserted into the Tribunal record
by the Assessing Officer, thereby implying manipulation of the

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record. We find the said submission to be wholly untenable and
devoid of substance warranting further examination.

18. The letter dated 01.12.2022 filed before the Tribunal does
not contain any such allegation. Further, the submission now
advanced before this Court also does not merit acceptance for
additional reasons. We have perused Form No.36, the grounds
of appeal, and the revised grounds of appeal. Form No.36 and
the accompanying documents are signed by the learned
counsel appearing for the Assessee before the Tribunal. The
page numbering in Form No.36 and its enclosures appears
continuous and uniform, without any variation in handwriting.
Moreover, the Tribunal record, as evidenced by the seal affixed
thereon, appears to have been completely scanned. In the
absence of any prima facie material in support of the allegation,
we do not find it necessary to examine the said unsubstantiated
contention any further.

19. The issue that now remains for consideration in both the
appeals is:
“Whether communication of an order without a DIN,
followed by subsequent generation and
communication of the DIN along with the order
containing the manually entered DIN, constitutes

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sufficient compliance with Circular No.19/2019 dated
14.08.2019?”

20. Mentioning of a DIN was introduced in all communications
issued by the Income Tax authorities relating to assessment,
appeals, orders, whether statutory or otherwise, exemptions,
enquiries, investigations, verification of information, penalty,
prosecution, rectification, approvals, etc. The requirement of
quoting a DIN was brought into effect from 01.10.2019. In
exceptional circumstances, issuance of a manual
communication without a DIN is permitted with the approval of
the Chief Commissioner or Director General of Income Tax. Any
communication issued without a DIN and without such prior
approval is treated as invalid and deemed never to have been
issued.

21. Before examining whether the requirement of mentioning
a DIN is mandatory or otherwise, it is necessary to consider the
object underlying the introduction of the DIN mechanism. The
object and purpose of such requirement can be gathered from
the opening paragraph of Circular No.19/2019 dated
14.08.2019, which reads thus:
“ With the launch of various e-governance initiatives,
Income-tax Department is moving toward total
computerization of its work. This has led to a

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significant improvement in delivery of service and has
also brought greater transparency in the functioning
of the tax-administration. Presently, almost all
notices and orders are being generated electronically
on the Income Tax Business application (ITBA)
platform. However, it has been brought to the notice
of the Central Board of Direct Taxes (the Board) that
there have been some instances in which the notice,
order summons, letter and any correspondence
(hereinafter referred to as “communication”) were
found to have been issued manually, without
maintaining a proper audit trail of such
communication.”


22. The purpose of the DIN mechanism is to maintain an
audit trail of communications. It is also intended to ensure that
proceedings initiated by the Income Tax Department are taken
to their logical conclusion and to assist the Income Tax
authorities in identifying pending actions initiated by them.

23. Paragraph 2 of Circular No.19/2019 mandates that no
communication shall be issued by an Income Tax authority
unless a computer-generated DIN has been allotted and duly
quoted in the body of such communication. There is not much
dispute regarding the mandatory requirement of a DIN in
respect of the communications referred to therein. The principal
controversy centres around the expression “duly quoted in the
body of such communication”.

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24. The requirement of mentioning a DIN applies to the
communications referred to in paragraph 2, namely,
assessment proceedings, appeals, orders, whether statutory or
otherwise, exemptions, enquiries, investigations, verification of
information, penalty proceedings, prosecution, rectification,
approvals, etc.

25. The affidavit filed by the Deputy Commissioner of Income
Tax explains the procedure relating to generation of DINs. It is
stated that the Income Tax Department utilizes the Income Tax
Business Application (ITBA) portal for carrying out official
functions and that officers are provided with ITBA login
credentials. It is further stated that different modules are
available in the ITBA system for carrying out various functions
assigned to officers depending upon their roles and
responsibilities.

26. The affidavit further explains that, for passing assessment
orders or issuing notices, two options are available to the
Assessing Officer, namely, generation through the ITBA system
itself or uploading of a manually prepared order. Where
assessment orders are passed through the ITBA portal, a DIN is
automatically generated, the document is digitally signed, and

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thereafter delivered to the registered e-mail addresses of the
Assessees or their representatives.

27. It is further explained that where orders are prepared
manually outside the ITBA system, such drafts are uploaded
onto the ITBA portal. Upon such uploading, the order may get
communicated to the Assessee without a DIN. This procedure is
stated to be necessitated on account of the non-availability of
certain functionalities in the ITBA system depending upon the
nature of the case. Once the manually prepared order is
uploaded, a DIN is generated in the ITBA system, and
thereafter the same order is communicated again with the DIN
pertaining to the document already uploaded, along with a copy
of the order containing the DIN. Such communication is
transmitted either through the registered e-mail addresses of
the Assessees or, in some cases, by post.

28. The affidavit also states that the communication carrying
the DIN of the document would itself bear a separate DIN for
purposes of authentication. It is further stated that the
requirement of recording reasons and obtaining approval from
the Chief Commissioner or Director General of Income Tax

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would arise only in cases where communications are manually
issued without a DIN.

29. From the material placed before this Court, the
submissions advanced, and the procedure explained in the
affidavit, it emerges that orders passed under Section 263 of
the Act and orders passed by the DRP under Section 144C of
the Act are uploaded for the purpose of generating a DIN.
Owing to the built-in mechanism in the ITBA portal, the order
uploaded without a DIN gets communicated to the Assessee
through the registered e-mail address. Such uploading is
necessary for generation of a DIN where the order has been
prepared outside the ITBA system. Immediately upon
generation of the DIN, a separate communication incorporating
the DIN of that document is issued. The order earlier uploaded
is also enclosed after manually incorporating the DIN on the
document.

30. Another aspect that requires notice is that the
communication itself bears a separate DIN. Such DIN
authenticates not only the communication but also the DIN
assigned to the document referred to therein. The
communication in one of the case is on the same date as the

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generation of the DIN and are issued on the very day on which
the document without a DIN was uploaded onto the ITBA
portal, whereas in another case it is on the next date.

31. In the light of the above material, this Court finds no
reason to disregard the procedure explained in the affidavit.
Moreover, where any ambiguity exists regarding compliance,
the purpose underlying the requirement must also be borne in
mind. The interpretation adopted should advance the object
sought to be achieved and not defeat it.

32. If a purposive and objective interpretation is accorded to
Circular No.19/2019, read in conjunction with the procedure
explained in the affidavit, the sequence that emerges is as
follows:
(i) The document is uploaded without a DIN for the
purpose of generating a DIN;
(ii) During that process, the document gets
communicated to the Assessee;
(iii) Immediately upon generation of the DIN, a
separate communication mentioning the DIN
assigned to that document, bearing a DIN for the
communication itself, along with the order

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containing the manually entered DIN, is also
communicated.

33. The overarching purpose discernible from the Circular is
the maintenance of an audit trail of departmental
communications. In the facts of the present cases, we are
satisfied that the procedure adopted achieves that objective
and adequately maintains the audit trail contemplated under
Circular No.19/2019.

34. The contention that, in the absence of prior written
approval from the Chief Commissioner or Director General of
Income Tax, the orders communicated without a DIN are
rendered invalid, does not merit acceptance. The exceptions
contemplated under the Circular relate to manual issuance of
the communications referred to in paragraph 2. In the present
cases, both orders were communicated electronically through
e-mail. The orders were initially communicated upon uploading
for generation of a DIN and, thereafter, the very same orders
were re-communicated after generation of the DIN through
separate communications assigning DINs to the respective
documents.

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C/W ITA No. 216 of 2023


35. In both cases, the uploading of the order for generation
of the DIN and the communication containing the DIN took
place either on the same date or on the next date. Therefore,
there was no manual communication of the orders so as to
attract the requirement of recording reasons in writing or
obtaining prior approval from the Chief Commissioner or
Director General of Income Tax.

36. There can seldom be a completely glitch-free
environment where technological systems are involved. There
can be no dispute that where a scheme is implemented through
technology and technical difficulties or operational issues arise,
appropriate measures must be taken to address them. It is in
that context that the Directorate of Income Tax (Systems),
entrusted with ensuring seamless technological functioning,
issued instructions dated 25.10.2019 introducing modifications
to facilitate generation of DINs for manually prepared
documents through the ITBA system. The said communication
specifically refers to the facility for generation of DINs in
respect of documents prepared outside the ITBA system and
thereafter uploaded manually into the ITBA portal for
generation of DINs.

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C/W ITA No. 216 of 2023


37. Instruction No.5 dated 25.10.2019 issued by the
Directorate of Income Tax (Systems), which introduced
changes in the facility for generation of DINs for manual
documents in the Income Tax Business Application (ITBA),
explains the complete mechanism for generation of DINs. As
per the said Instruction, where a document is issued outside
the ITBA system, the user is required to upload the manually
prepared order along with a letter for generation of a DIN. After
the DIN is generated and quoted in the physical copy, the
document can be uploaded. In such cases, an intimation letter
containing the DIN of the document as well as the DIN of the
intimation letter itself is required to be shared through the e-
Filing portal for authentication purposes, enabling the Assessee
to verify the authenticity of the letter, notice, or order issued
by the Income Tax authorities.

38. In the light of Instruction No.5, Circular No.19/2019
cannot be read in isolation. As observed hereinabove, when a
technology-driven procedure is introduced, errors and glitches
are not uncommon. Any deficiency attributable to the
technological process cannot be permitted to defeat the very
object sought to be achieved. What is required to be examined

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C/W ITA No. 216 of 2023


is whether there has been substantial compliance in
furtherance of the object underlying the Circular No.19/2019.

39. The affidavit placed on record by the AO, explaining the
process/procedure involved in generating the DIN, is in
conformity with Circular No.19/2019 and Instruction No.5.
Accordingly, we find justification, legality, and substance in the
contents of the affidavit.

40. When the purpose and object behind the requirement of
quoting a DIN, as reflected in Circular No.19/2019, are kept in
view, we are of the considered opinion that the orders in
question substantially comply with the requirements of the
Circular.

41. Another submission advanced on behalf of the Assessees
is that the DIN manually entered in both the orders, namely the
order of the DRP and the order passed under Section 263 of the
Act, is an incorrect number. We do find that such an error
exists in both the orders. However, in our considered view, the
said mistake neither invalidates the communication nor results
in non-compliance with Circular No.19/2019.

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C/W ITA No. 216 of 2023


42. In both cases, the orders were uploaded in the ITBA
system for the purpose of generating DINs. Owing to the
automated communication of the uploaded documents to the
Assessees, the orders initially stood communicated without a
DIN. However, as is evident from Instruction No.5, upon
generation of the DIN, the DIN pertaining to the order is
communicated through an intimation letter, accompanied by
the order in which the DIN is manually entered.

43. In both cases, the intimation letter contains two DINs-one
pertaining to the order communicated and the other pertaining
to the intimation letter itself. It appears that, owing to
oversight, while manually entering the DIN in the orders, the
DIN assigned to the intimation letter came to be mentioned
instead of the DIN assigned to the order. Such an error, by
itself, would neither amount to violation of Circular No.19/2019
nor invalidate the communication made thereunder.

44. The error is essentially typographical in nature and may
warrant greater care on the part of the Income Tax authorities
while manually entering DINs. Moreover, the intimation letter
itself specifically refers to the provision under which the order

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C/W ITA No. 216 of 2023


has been passed, the date of the order, and the DIN assigned
to that order.

45. For the sake of convenience, the relevant portion is
extracted hereunder:


And

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C/W ITA No. 216 of 2023




46. In the light of the foregoing discussion and for the
reasons recorded hereinabove, we hold that an incorrect
mention of the DIN in the order would not invalidate the order
when the accompanying intimation letter contains the correct
DIN pertaining to such order.

CONCLUSION
(i) The requirement of quoting a Document
Identification Number (DIN) in communications
issued by the Income Tax Department, as

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C/W ITA No. 216 of 2023


contemplated under Circular No.19/2019 dated
14.08.2019, is mandatory.
(ii) Where the DIN is subsequently communicated
through an intimation and such intimation bears its
own DIN while also referring to the DIN of the
enclosed order, the order cannot be held to be
invalid merely on the ground that the DIN was not
originally reflected in the communication. An order
would attract invalidity under Circular No.19/2019
only where no DIN is generated or communicated
at all.
(iii) The requirement of obtaining prior approval from
the Chief Commissioner or the Director General of
Income Tax for issuance of a communication
without a DIN arises only in cases where the
communication is made manually and not through
the electronic mode.
(iv) The object of Circular No.19/2019 is to maintain an
audit trail and authenticity of departmental
communications. Where the procedure adopted
sufficiently establishes the identity and traceability

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C/W ITA No. 216 of 2023


of the communication, the object of the Circular
stands achieved.
(v) A mere error in manually mentioning the DIN in the
order would not invalidate the order, provided the
accompanying intimation letter correctly identifies
the order, contains the correct DIN pertaining to
such order, and enables verification of its
authenticity.

47. In view of the above, the following:

ORDER

(i) ITA Nos.55/2024 and 216/2023 are allowed .
(ii) The substantial questions of law are
answered in favour of the Revenue and
against the Assessees.
(iii) The orders passed by the Income Tax
Appellate Tribunal, Bengaluru, in IT(TP)A
No.851/Bang/2022 dated 31.05.2023 and
ITA No.625/Bang/2021 dated 06.12.2022 are
hereby set aside.

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C/W ITA No. 216 of 2023


(iv) The appeals in in IT(TP)A No.851/Bang/2022
dated 31.05.2023 and ITA
No.625/Bang/2021 dated 06.12.2022
stand remitted to the Income Tax Appellate
Tribunal, Bengaluru, for consideration of the
issues/grounds raised in the appeals.
(v) No order as to costs.
Pending I.As’ if any, stand disposed of.
We place on record our appreciation for the able
assistance rendered by Sriyuths Sri Amaregouda Kellur,
Research Assistant, and Sri Harshith A., Law Intern.



Sd/-
(S.G.PANDIT)
JUDGE


Sd/-
(K. V. ARAVIND)
JUDGE





MV/DDU