Income Tax Department to move Supreme Court against Delhi High Court ruling on validity of Orders

The Income Tax 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 a 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.