Income Tax Assessment Order issued without DIN is Void Ab Initio: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai ruled that the income tax assessment order issued without mentioning Document Identification Number (DIN) in is void ab initio.

The appellant, Kaliyaperumal Padmanaban, challenged the validity of the assessment order dated September 29, 2021, for the assessment year 2012-13, asserting that the Assessing Officer (AO) failed to follow the law by not incorporating the computer-generated DIN in the body of the assessment order.

Appearing for the appellant, Mr. N. Arjun Raj, Advocate, argued that this omission contravened the binding CBDT Circular, rendering the assessment order invalid and legally non-existent. To support this contention, referred authoritative judicial pronouncements, including the Madras High Court judgment in CIT, International Taxation, Chennai v. M/s Laserwoods US Inc., and the Bombay High Court decision in Ashok Commercial Enterprises v. ACIT, which emphasize strict adherence to the DIN mandate.

Appearing for the respondent, Ms. Anitha, Additional Commissioner of Income Tax, contended that although the DIN was not incorporated in the assessment order's body, it was generated and communicated to the appellant via an intimation letter on the same day. It was submitted that this subsequent communication sufficed to cure any procedural lapse and that the appellant suffered no prejudice, warranting dismissal of the appeal.

The Bench comprising of Judicial Member, Aby T. Varkey and Accountant Member, Amitabh Shukla, rejected the respondent’s argument. It was held that the CBDT Circular mandates that the DIN must be quoted in the body of the communication itself, barring limited exceptions which were not applicable in this case. The absence of DIN in the order itself constitutes a violation of the binding Circular, rendering the assessment order invalid ab initio.

The tribunal further clarified that subsequent electronic intimation of the DIN cannot retrospectively validate a communication that does not conform to the prescribed procedural requirements. The tribunal emphasized that this mandate aligns with the "Rule of Law" principle, and arbitrary omission of statutory procedures cannot be condoned.

Accordingly, quashed the impugned assessment order for non-compliance with the CBDT Circular regarding DIN under Section 144 read with Section 147 of the Income Tax Act, 1961, and refrained from adjudicating the substantive merits of the assessment.

Thus, the appeal was allowed.

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