DIN Requirement Breached Initially but Rectified Within 15 Days: Patna HC Validates Income Tax Notices [Read Order]

In a recent ruling, the Patna High Court upheld the validity of income tax reassessment notices, ruling that the initial procedural lapse concerning the absence of a Document Identification Number (DIN) was subsequently rectified within the permitted timeframe.

Shree Shakambhari Udyog, the petitioner, a partnership firm based in Patna, challenged reassessment notices and orders issued under Section 148 of the Income Tax Act, 1961. These notices were allegedly issued manually without digital signatures or Document Identification Numbers (DIN), contrary to the requirements set out in Circular No. 19/2019 and Notification No. 61/2019 issued by the Central Board of Direct Taxes.

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The petitioner's counsel argued that the Income Tax Department had acted in defiance of mandatory procedural safeguards under the e-Assessment Scheme, 2019, by manually issuing notices and orders without DINs or digital authentication. They further argued that the reliance on the complaint made by a partner, without allowing the petitioner to cross-examine the complainant, invalidated the assessment proceedings.

In response, the revenue counsel argued that the defect in manual issuance had been cured the same day when a digitally signed order with a valid DIN was issued. They further argued that there was no requirement for cross-examination since no formal deposition or testimony had been taken.

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A division bench comprising Justice Rajeev Ranjan Prasad and Justice Shailendra Singh observed that the reassessment order, although initially issued without DIN and digital signature, had been regularized within the time permitted under the CBDT circulars. The court held that the subsequent issuance of a digitally signed document cured the procedural defect. On the issue of natural justice, the court observed that the reassessment was based on documents, not witness statements, so no cross-examination was required.

The bench ruled that no jurisdictional error was apparent in the assessment or penalty orders, and that the petitioner could pursue appeals before the competent authority. While dismissing the writ petitions, the court granted the petitioner liberty to file an appeal within four weeks, directing the appellate authority to consider the delay sympathetically, given that the petitioner had been pursuing writ relief under legal advice.

To Read the full text of the Order CLICK HERE

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