SC issues interim stay on Delhi HC’s ruling on DIN

financialexpress.com:

The Supreme Court on Wednesday issued an interim stay on the Delhi High Court’s order which declared that any Income Tax (IT) assessment order issued without Document Identification Number (DIN) has no legal standing.

The apex’s court division bench hearing the matter remarked that not mentioning DIN in assessment orders may be an “irregularity” but doesn’t make it an “illegality”. It noted that quashing the assessment orders that don’t contain DIN is “too serious a consequence.”

On December 4, FE had reported that the IT department (ITD) is likely to file an appeal in the Supreme Court against the Delhi HC ruling.

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.

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 the phraseology used in paragraph 4 of the CBDT 2019 circular.

Amit Maheshwari, Tax Partner, AKM Global, said, “the SC has taken a pragmatic view of the issue that at most, not mentioning DIN can be a procedural irregularity, but it cannot be a basis for quashing the assessment order in itself.”
“This might also give another chance to the tax department to make assessment to already