Supreme Court: The Delhi High Court’s ruling that any Income Tax (IT) assessment order issued without a Document Identification Number (DIN) has no legal basis was deemed unenforceable by the Supreme Court on Wednesday, and it was given an interim stay.
While not mentioning DIN in assessment orders may be a “irregularity,” it does not make them “illegal,” according to the bench of the supreme court hearing the case. Quashing the evaluation orders that do not contain DIN is seen to be “too serious a consequence.”
According to a report published by FE on December 4, the IT department (ITD) is probably going to appeal the Delhi High Court’s decision to the Supreme Court.
Central Board of Direct Taxes
In April, the Delhi High Court upheld the terms of a Central Board of Direct Taxes (CBDT) circular from 2019 that mandated the use of DIN on all issued papers.
Any communication by any Income Tax Authority (ITA) without a DIN will be regarded as invalid and will be presumed to have never been issued, according to a CBDT circular dated August 14, 2019 that the CBDT released.
The IT Department argued before the Delhi High Court that the evaluation procedures shouldn’t be invalidated because the failure to produce and distribute DIN is, at most, an error or a fault that falls within section 292B of the IT Act.
But given the wording employed in paragraph 4 of the CBDT 2019 circular, the HC noted that the claim that recourse may be made under Section 292B of the Act is “untenable.”
The SC has adopted a pragmatic stance on the matter, according to Amit Maheshwari, Tax Partner at AKM Global, who stated that while failing to specify DIN may constitute a procedural irregularity, it cannot serve as justification for nullifying the assessment ruling on its own.
The tax agency may be given another opportunity to review cases that have previously been closed, which would cause the taxpayers further inconvenience, he added.
