DIN is not required in Satisfaction note which is a procedural aspect for issuing notice u/s 148 of the Act which already contains the DIN number and date.
In a recent judgment the Hon’ble Supreme Court has dismissed the Special Leave Petition (SLP) against the decision of the High Court holding that satisfaction note u/s 148 cannot be said to be communication as contemplated under the Circular No.19/2019 and even otherwise the same can be regularized by issuing the copy of the said satisfaction note with DIN number which would be a procedural aspect for issuing notice under Section 148 of the Act which already contains the DIN number and date
ABCAUS Case Law Citation:
4446 (2025) (03) abcaus.in SC
A search under Section 132 of the Income Tax Act, 1961 (the Act) was carried out in case of a Business Group wherein the incriminating documents and digital data was found and seized.
The Assessing Officer (AO) sent a proposal based upon the documents found and seized during the course of the aforesaid search to the Principal Commissioner of Income Tax to initiate the reassesssment proceedings for the relevant Assessment Year.
The AO also recorded the satisfaction note based on which the impugned notice under Section 148 of the Act was issued the assessee. Aggrieved by the notice issued u/s 148 of the Act, the assessee preferred a petition before the Hon’ble High Court praying for quashing and setting aside the impugned notice u/s 148.
CBDT Circular No. 19/2019 dated 14.08.2019 lays down that no communication shall be issued by any income tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 15th day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication.
Before the Hon’ble High Court, the Petitioner submitted that petitioner submitted that the satisfaction note provided on the portal was without any DIN number or date. It was submitted that in absence of date or DIN number in the satisfaction note as per the CBDT Circular No. 19/2019, the initiation of the reassessment proceedings would be vitiated and the satisfaction note shall be deemed to have been never issued.
It was further submitted that even on perusal of the satisfaction note, no reference was made to the petitioner-assessee or any incriminating material found during the course of search relating to the petitioner so as to assume the jurisdiction to initiate the reassessment proceedings under Section 147 of the Act.
In support of his submissions, the Petitioner placed reliance on Circular No. 24/2015 dated 31.12.2015 issued by the CBDT, wherein relying upon the decision of Hon’ble Apex Court, the CBDT has held that the satisfaction note of searched person should be issued as per the guidelines issued by the Hon’ble Supreme Court in the then existing provision under Section 158BC and thereafter under Section 153C of the Act.
The Petitioner placed reliance on the decision of the Hon’ble Bombay High Court held that the assessment order was invalid on account of it being issued without a DIN. In the said decision the Hon’ble High Court specifically held that CBDT Circular 19/2019 also applies to the satisfaction note as a communication of the specified type issued to any person.
Thus, it was contended that t as the satisfaction note being undated and without any DIN number, the approval granted by the competent authority under Section 151 of the Act would also become redundant.
The Hon’ble High Court opined that in first blush it appears that the satisfaction note uploaded on the portal being without date and DIN number, would invalidate and vitiate the entire reassessment proceedings and the impugned notice under Section 148 of the Act would be without jurisdiction. However, the entire scheme of reopening in has undergone a change by paradigm shift. As per the present amendment brought on statute with effect from 1/4/2021, Section 148 provides for a composite scheme for reopening read with Section 148A of the Act. So far as search cases are concerned, the opportunity of hearing by issuance of show cause notice is done away which is otherwise made applicable in the cases which are not arising out of the search proceeding and the decision of the Hon’ble Apex Court in case of Gkn Driveshafts is now given a form of statutory provisions under Section 148A of the Act.
The Hon’ble High Court observed that under section 148 of the Act there is no provision to give a copy of satisfaction note recorded by the Assessing Officer along with the notice under Section 148 of the Act. The Assessing Officer had uploaded the satisfaction note which is an internal communication sent along with the proposal. The said satisfaction note therefore, cannot be said to be communication as contemplated under the Circular No.19/2019 and even otherwise the same can be regularized by issuing the copy of the said satisfaction note with DIN number which would be a procedural aspect for issuing notice under Section 148 of the Act which already contains the DIN number and date.
With respect of the reliance placed on behalf of the petitioner on the decision of the Bomaby High Court, the Hon’ble High Court observed that it also provides for regularization of the satisfaction note by issuing the DIN number, which the Revenue had agreed and had undertaken to issue the satisfaction note with DIN number to the assessee at the time of issuance of notice for reassessment or as may be requested by the assessee.
In view of the above, the Hon’ble High Court dismissed the appeal of the assessee/Petitioner.
Not satisfied with the dismissal of appeal by the Hon’ble High Court, the Petitioner challeneged the order before the Hon’ble Supreme Court by way of filing a Special Leave Petition (SLP).
However, the Hon’ble Supreme Court dismissed the said SLP with the following observations,
“Heard the learned counsel appearing for the petitioner. We are not inclined to interfere with the impugned judgment passed by the High Court. Hence, the Special Leave Petition is dismissed”
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