Section 292B can’t Rectify Error of Failure to Mention DIN in Assessment Order: HC

Case Details: CIT (International Taxation) Vs. Brandix Mauritius Holdings Ltd. - [2023] 149 taxmann.com 238 (Delhi)

Judiciary and Counsel Details

• • Rajiv Shakdher & Ms Tara Vitasta Ganju, Jj.
  • Puneet Rai, Ashvini Kumar & Ms Madhavi Shukla for the Appellant.
  • Ajay Vohra, Sr. Adv. & Guruprasad, Adv. for the Respondent.

Facts of the Case

The instant appeal was filed before the Delhi High Court by the revenue against the order of the Tribunal. The Tribunal relied on the CBDT’s Circular No. 19/2019 dated 14.08.2019 and set aside the final assessment order passed by the Assessing Office (AO) without mentioning Document Identification Number (DIN).

The AO believed that the failure to generate and allocate DIN is a mistake or, at best, a defect and/or an omission, which ought not to invalidate the assessment proceedings as per section 292B.

High Court Held

The Delhi High Court held that Circular No. 19/2019 sets out how DIN is required to be circulated while communicating a notice, order, summon, letter and any correspondence issued by the Income Tax Department. It mandates the allocation of DIN for every communication issued by any income tax authority to the assessee or any other person. It also provided for manual communication in exceptional circumstances that required approval from the appropriate authority within 7 days or 15 days, as the case may be.

The Court held that the object and purpose of the issuance of the circular was to create an audit trail. The circular clearly provided that any communication not in conformity with the provisions of the circular, be treated as invalid and deemed to have never been issued. The phraseology of the circular also includes communication of assessment order rendering it non-est in law. There was nothing on record to show that the AO took steps to demonstrate that there were exceptional circumstances which would sustain the communication of the final assessment order manually without DIN.

Further, such circulars issued by CBDT are binding on the department officials. The argument advanced on behalf of the AO that recourse can be taken to Section 292B is untenable, having regard to the phraseology used in the circular.

Thus, the Court held that not mentioning DIN in the communications cannot be considered a defect or mistake and upheld the Tribunal’s decision.