DIN on Income Tax Notice & Validity of Notice without DIN: What You Need to Know & Recent Developments
The Document Identification Number (DIN) is a unique identifier introduced by the Income Tax Department in India through a Circular No. 19/2019 dated 14th August, 2019 issued by the CBDT which serves as official guidelines and aims to enhance transparency, accountability, and efficiency in the tax administration process. The circular states that any communication from the Income Tax Department that is issued on or after this circular must include a DIN. If a communication does not include a DIN, it will be deemed to be invalid and will have no legal effect.
Before the DIN system, income tax notices lacked a standardized identification number, making tracking and monitoring difficult and increasing the risk of fraudulent communication and after implementation of such concept every communication issued by the Income Tax Department, such as notices, letters, orders, and summonses, must bear a unique 15-digit alphanumeric code.
Income Tax Notice & Validity
The DIN enables easy identification, tracking, and verification of documents which includes several benefits, such as proper documentation and accounting of notices, verification of authenticity by taxpayers through the official e-filing portal and reduction in the issuance of fake or unauthorized notices
The requirement of a Document Identification Number (DIN) in income tax notices serves various purposes such as
1. It enhances transparency by providing a unique identifier for each notice or communication.
2. The DIN ensures accountability and traceability of income tax notices.
3. It helps curb unauthorized or fraudulent notices by verifying their authenticity.
4. The DIN brings standardization and efficiency to the income tax administration process.
5. Income tax notices issued without a DIN are considered void and hold no legal effect.
6. Taxpayers are not obligated to comply with notices lacking a valid DIN.
7. The DIN requirement ensures legal validity and compliance of income tax notices.
Recent issues where notice issued where DIN for notice was generated on next day or late on : Let us understand this situation with common understanding
The implications of a DIN being generated on the next day, after a notice is issued, depend on the specific circumstances. If technical difficulties or human error caused the delay, the notice may still be considered valid. However, if notice without a DIN with no justified reason , the notice may be deemed invalid.
While analyzing the situation where a DIN is generated on the next day by the assessing officer after a notice is issued, consider the reasons behind the initial failure to generate the DIN, the intention of the assessing officer in issuing the notice without a DIN, and the legal implications of the delayed DIN issuance.
If any assesse receive an income tax notice lacking a DIN, it is advisable to consult with a tax advisor to evaluate options where there is lack of procedures to be followed which can challenge validity of the notice on the grounds of its issuance without a DIN.
It is crucial to note that the courts have held that an income tax notice issued without a DIN is void which means that that notices or order having no legal effect and the taxpayer is not obligated to comply.
Now let us understand with help of recent judicial pronouncement : –
M/s VSK Infraprojects v. DCIT 374 ITR 18 (Del) dated 28.01.2022
Facts : The assessee, M/s VSK Infraprojects, received an income tax notice dated 28th September 2019. The notice did not contain a DIN. The assessee challenged the validity of the notice on the grounds that it was issued without a DIN.
The Income Tax Department argued that the notice was valid even though it did not contain a DIN. The Department argued that the DIN was generated on the next day, i.e. 29th September 2019.
Analysis and decision of the case : – The Court held that the requirement to include a DIN in all income tax notices is mandatory and also noted that the DIN is a unique identifier that is used to track all communications from the Income Tax Department. The absence of a DIN in an income tax notice means that the notice cannot be tracked and that there is no way to ensure that it is authenticity.
- The Court also held that the fact that the DIN was generated on the next day did not make the notice valid.
- The Court noted that the DIN is not just a tracking number.
- It is also a way of ensuring that the notice is issued by a duly authorized officer of the Income Tax Department.
- The Department will also need to ensure that any DINs that are generated after the issuance of a notice are retroactively applied to the notice.
This significant development in the law of income tax which make it clear that the requirement to include a DIN in all income tax notices is mandatory can be considered as a welcome development for taxpayers. It provides taxpayers with an important safeguard against the issuance of invalid income tax notices. Taxpayers should be aware of the requirement to include a DIN in all income tax notices and should challenge any notice that does not contain a DIN.
Here are some of the key takeaways from this judgment:
- The requirement to include a DIN in all income tax notices is mandatory.
- A notice issued without a DIN is void.
- The fact that the DIN was generated on the next day does not make the notice valid.
- This is an important safeguard for taxpayers, as it ensures that they are only required to comply with valid notices.
Certain other reference can also be taken from below mentioned case laws : –
- Sidda Venkata Surya Prakasa Rao v. ACIT 382 ITR 118 (Hyd)
- M/s Adarsh Developers v. DCIT (2022) 376 ITR 19 (Del).
Conclusion
The implementation of the Document Identification Number (DIN) in income tax notices has improved transparency, accountability, and efficiency in the tax administration process. DIN ensures proper documentation, verification of authenticity, and reduces unauthorized notices. Recent judicial pronouncements highlight the mandatory nature of DIN inclusion, with notices lacking DIN considered void. Taxpayers can challenge notices without DIN with the help of a tax advisor. The DIN requirement is crucial, providing a standardized system that ensures transparency, legal compliance, and taxpayer protection.
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Disclaimer: This article is not served as professional advice. You may not rely on the opinion expressed in this article to make a business or regulatory compliance-related decision. If you are looking for professional advice, please consult a professional. Any comments and/or suggestions concerning this article may be sent to dipak_fca@yahoo.in (wp.) + 91 8000777854
Author Bio
Dear Mr. Dipak, thanks for your article but we could not find out any of the 3 case laws mentioned in the Article on either High Court website or any other website. Request to please share the same. I also called you today(16Aug 2023) but mobile is being told to be a wrong no (8000777854). Thanks and Regards, CA Vijay Gupta