In what could be a significant developmentpertaining to income tax assessments, theSupreme Court has granted a stay on a Delhi HighCourt judgement, which said that any assessmentwithout a Document Identification Number will benon-existent in law.
If an assessment is issued without a DIN and if itis held non-existent because of this fact, the topcourt said that a vacuum will build up, whichmight have serious consequences.
The court said that such an assessment could bean ‘irregularity’ but not an ‘illegality’.
This observation by the court may spark debate.However, considering that this is an interim orderand not a final order, one should not read toomuch in between the lines, Amit Singhania,partner at Shardul Amarchand Mangaldas, toldNDTV Profit.
According to S. Vasudevan, partnerLakshmikumaran & Sridharan, the Delhi high courtjudgement stood on sound footing, as the circularissued by the CBDT was binding on the incometax authorities, and non-compliance thereofrenders the proceedings invalid.
The stay does not affect the precedence value ofthe high court judgement and can still be reliedupon by the taxpayers, Vasudevan said.
DIN Less Assessments
The entire controversy behind a DIN-lesscommunication by the revenue department dates back to a 2019 circular.
The circular, in clear terms, mandated that nocommunication shall be issued by any income taxauthority relating to assessment, appeals, orders,statutory or otherwise, exemptions, enquiry,investigations, etc. to any person on or after Oct.1, 2019, unless a computer-generatedallotted.
The purpose of allocating a DIN to suchcommunications was to maintain a proper audittrail.
The circular also issued certain circumstancesunder which exceptions could be made. Theseinclude technical difficulties in generating a DIN,issues pertaining to PAN migration, and the like.
Even then, it was clearly stated that anyirregularity in issuing a DIN must be dealt with bythe authorities within a stipulated time.
In essence, the circular said that anycommunication without a DIN will be held non-estin law.
In 2023, the Delhi High Court was faced with acase pertaining to an assessment order passedwithout a DIN. It was contested by the revenuedepartment that the failure to allocate DIN was amere mistake.
Since it was a mistake, the departmentcontended that the assessment proceedingsshould not be invalidated and that this omissioncan be cured under the Income Tax Act.
However, the high court was not inclined toaccept this line of reasoning. The circular’sphraseology makes it clear that anycommunication without DIN can have no standingin law, it said.
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