Supreme Court to decide if non mentioning DIN by income tax authorities makes order void

Supreme Court to decide if non mentioning DIN by income tax authorities makes order void or it’s just a procedural mistake

ABCAUS Case Law Citation:
ABCAUS 3855 (2024) (02) SC

CBDT Circular No.19/2019 dated 14^th August 2019 provides that on or after the 15th day of October, 2019, 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, unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication. Though exceptions were provided in the case of technical difficulties or other circumstances as provided.

The purpose of the above direction was to maintain proper audit trail of all communications.

Resorting to the above Circular, in a number of cases, the assessees have challenged the assessment order/notices issued by the Income Tax Department.

Based on the directions of the Circular, the various ITATs have ruled in favour of the assessee on further appeal, High Courts too have ruled that not mentioning the DIN number in order of the AO, the order will lose its validity and makes it Income Tax order without DIN void ab initio. The appeal of the Revenue have been dismissed by the High Courts in such cases holding that no substantial question of law arises for consideration.

Supreme Court stays Delhi High Court order

In particular, the Delhi High Court by a detailed order held that any communication which is not in conformity with the 2019 Circular is to be treated as invalid, as if it was never issued. The Hon’ble Delhi High Court rejected the contention of the Revenue that failure to generate and allocate DIN in this case is a mistake or at best, a defect and/or an omission, which ought not to invalidate the assessment proceedings.

However, the Revenue challenged that order of the Delhi High Court before the Hon’ble Supreme Court.

Recently, the Apex Court has stayed the order of the Delhi High Court and ITAT which held non mentioning of DIN makes order void.

Now, the question of validity of income tax order/notices without DIN rests with the Hon’ble Supreme Court and shall be decided in due course. Tentative next listing of the case is in February 2024.

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