Ahmedabad ITAT: Revision Proceedings Start Without DIN is Consider Invalid

The Income Tax Appellate Tribunal (ITAT) in Ahmedabad has ruled that the initiation of revision proceedings without a Document Identification Number (DIN), through issuing a show cause notice and issuing a revision order, is not valid under the law.

The ITAT bench, comprising T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member), noted that the Office of the Principal Commissioner of Income Tax (PCIT) did not adhere to CBDT Circular No. 19/2019. The PCIT failed to provide a justification for not quoting the DIN in the revision order, despite making the same mistake when issuing the show cause notice to the assessee.

Consequently, both the show cause notice dated March 2, 2022 and the revision order dated March 30, 2022, are not in compliance with paragraphs 2 and 3 of CBDT Circular No. 19/2019. As a result, the entire revision proceeding is considered invalid and is considered to have never been instigated.

The appellant/assessee is a privately limited company running its real estate business and undertaking the development of a commercial project known as “Titanium-1.” During the assessment year 2017-18, the company submitted its income tax return, disclosing the total income and book profit under the Minimum Alternative Tax (MAT).

The return underwent scrutiny assessment to verify the accuracy of the reported sales turnover, as inconsistencies were observed between the turnover figures in the service tax return and the income tax return. Furthermore, the report also included an examination of the company’s earnings from exempt income.

The Assessing Officer issued show cause notices on August 30, 2019, and October 18, 2019, under sections 142(1). After considering the assessee’s submissions, the Assessing Officer accepted the declared income and issued a regular assessment order under section 143(3) of the Income Tax Act.

The assessee raised questions about the revision proceedings, prompting the PCIT to set aside the assessment and instruct the Assessing Officer to recompute the disallowance under Section 14A read with Rule 8D while granting the assessee an opportunity.

The assessee argued that the show cause notice dated March 2, 2020, and the revision order dated March 30, 2022, lacked a document identification number, rendering the revision proceedings invalid under CBDT Circular No. 19/2019 dated August 14, 2019. Therefore, the assessee requested the court to quash the entire revision proceedings.

In response, the department argued that despite the absence of the DIN in the show cause notice, it was indeed generated on March 2, 2022, and subsequently conveyed to the assessee through Speed Post on March 3, 2022. The assessee also acknowledged the DIN in their response to the show cause notice, uploaded through the Income Tax Business Application (ITBA).

Similarly, the DIN relating to the revision order was communicated to the assessee on March 31, 2022. Thus, the department argued that while the DIN was not present in the show cause notice and the revision order initially, it was later generated and communicated to the assessee. Therefore, both the show cause notice and revision order are legally valid.

The court concluded that the PCIT’s failure to include the Document Identification Number (DIN)  in the revision order, despite committing the same mistake when issuing the show cause notice, was unjustified.