High Court had said orders without document identification number lacks legal standing
The Income Tax (IT) Department is likely to file an appeal in the Supreme Court (SC) against a Delhi High Court (HC) ruling which declared any IT assessment order issued without Document Identification Number (DIN) has no legal standing.
The Delhi HC, in April, had upheld the provisions of a 2019 Central Board of Direct Taxes (CBDT) circular which had made DIN mandatory for documents issued.
As per a CBDT circular dated August 14, 2019 issued by the CBDT, any communication by any Income Tax Authority (ITA) without DIN shall be treated as invalid and shall be deemed to never have been issued.
“At max, the non-generation of a DIN in the IT order is a technical glitch. There have been several instances, where due to technical difficulties the DIN was not mentioned in the order. However, with the Delhi HC ruling, several orders that were issued in the passed are not legally valid,” a government source said.
“We (IT Department) are mulling to file an appeal in the Supreme Court. The process for filing the appeal is getting finalised, some expert opinions are being sought,” the source said.
Before the Delhi High Court, the IT Department had submitted that failure to generate and allocate DIN is a mistake or at best, a defect (that can be covered under section 292B of the IT Act), which ought not to invalidate the assessment proceedings.
However, the HC observed that the argument that recourse can be taken to Section 292B of the Act, is “untenable”, in view of to the phraseology used in paragraph 4 of the CBDT 2019 circular.
Amit Maheshwari, Partner- Tax, AKM Global, explained, “The Delhi HC ruling affirms two important legal positions, one that circulars issued by CBDT are absolutely binding / mandatory in nature and the tax department cannot deviate from the methodology prescribed by CBDT in garb of pleading a mistake or an omission. Secondly, the High Court has held non-compliance of CBDT circular is a jurisdictional error and cannot be cured by resorting to section 292B.”
Saurrav Sood, Practice Leader – International Tax and Transfer Pricing at SW India, said, “taking advantage of this (Delhi HC) judgement, the courts have been flurried with various writs by the taxpayers, where such DIN is missing. It is to take care of such interpretation that Department may be contemplating to challenge the order of High Court, since in case of time barring notices/order, DIN cannot be applied later to validate such order.”
Source: https://www.financialexpress.com/money/income-tax-i-t-dept-to-move-sc-against-hc-ruling-on-validity-of-orders-3326731/
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