ITAT Delhi: Approval Under Income Tax Section 153D is Not Valid if the DIN is Absent

Overview

For the matter of Bawa Float Glass Ltd Vs DCIT, the Income Tax Appellate Tribunal (ITAT) Delhi addressed the legal approval granted issue under section 153D of the Income Tax Act lacking a Document Identification Number (DIN). The taxpayer challenged the absence of DIN directing to the important decision via the tribunal.

In-depth Examination

Background: Bawa Float Glass Ltd files a petition against the appellate order of the Commissioner of Income Tax (Appeals) for the assessment order passed through the Assessing Officer (AO) under Section 153A r.w.s 143(3) of the Income Tax Act for Assessment Year 2018-19.

Supplementary Basis

The taxpayer seeks another ground contesting the legitimacy of approval under section 153D due to the absence of DIN, citing CBDT Circular No.19/2019. The tribunal admitted this basis for adjudication.

Legal Assertions

The absence of DIN on the communication of approval rendered it null and void, according to the CBDT Circular 19/2019, the taxpayer contended. The failure to comply with this circular, as per the taxpayer, invalidated the assessment order.

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Legal Precedents

The tribunal directed the matter of Finesse International Design Pvt. Ltd. vs. DCIT, which addressed an identical problem. It specifies distinct judgments emphasizing the mandatory nature of DIN in communications, highlighting its prestige for validity.

Response from Revenue Authorities

The absence of DIN was a procedural peculiarity and did not affect the validity of the assessment order, the Revenue contended. They claimed that these technical lapses must be regarded leniently.

Ruling by the Tribunal

Regarding the discussions and precedents, the tribunal held in favour of the taxpayer. It carried that the absence of DIN on the legal approval rendered it non-est in the sights of the statute, rejecting the assessment order under section 153A.

Final Remarks

In the decision of ITAT Delhi for Bawa Float Glass Ltd Vs DCIT emphasizes the significance of procedural compliance, specifically for DIN requirements. The ruling of the tribunal emphasizes the significance of complying with the circulars of CBDT for the validity of legal approvals under the Income Tax Act.

The decision of ITAT reaffirms the principle that procedural anomalies, including the absence of DIN, can invalidate legal approvals under the Income Tax Act. The same matter serves as a reminder for tax heads to validate the stringent compliance with procedural necessities to maintain the assessment orders’ legality.