Initiation Of Revision Proceedings By Issuing Show Cause Notice And Passing Revision Order Without DIN Are Invalid: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the initiation of revision proceedings by issuing show cause notice and passing a revision order without a Document Identification Number (DIN) is invalid.

The bench of T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) have observed that the Office of the PCIT has literally not followed CBDT Circular No. 19/2019. The office of the PCIT has not justified not quoting DIN even in the revision order, where the same mistake was committed by it while issuing SCN to the assessee. Therefore, the communication, namely the SCN dated March 2, 2022, and the revision order dated March 30, 2022, are not in conformity with paragraphs 2 and 3 of this Circular No. 19/2019 issued by CBDT. Therefore, the entire revision proceeding is to be treated as invalid and shall be deemed to have never been initiated.

The appellant/assessee is a private limited company engaged in the real estate business and the development of a commercial project called “Titanium-1”. For the assessment year 2017–18, the assessee filed its Return of Income, declaring total income and book profit under the Minimum Alternative Tax (MAT). The return of income was taken up for scrutiny assessment to verify the sales turnover since higher turnover was reported in the service tax return as compared to the income tax return and also to verify the earning of exempt income.

The Assessing Officer issued show cause notices under sections 142(1), 30.08.2019, and 18.10.2019, considered the submissions of the assessee, and accepted the income returned by the assessee by passing a regular assessment order under section 143(3) of the Income Tax Act.

The assessee submitted its objection to the revision proceedings. The PCIT set aside the assessment with a direction to the Assessing Officer to recompute the disallowance under Section 14A read with Rule 8D after giving the assessee an opportunity.

The assessee contended that the show cause notice dated March 2, 2020, and the revision order dated March 30, 2022, passed by the PCIT do not carry a document identification number. Therefore, as per CBDT Circular No. 19/2019 dated August 14, 2019, the revision proceedings themselves are invalid in law, and the entire revision proceedings are liable to be quashed.

The department contended that though the show cause notice was not carrying the DIN, it was generated on March 2, 2022, and communicated to the assessee physically by Speed Post on March 3, 2222. The assessee, in reply to the show cause uploaded in the Income Tax Business Application (ITBA), has clearly mentioned the above DIN. Similarly, the assessee was informed on March 31, 2022, of the DIN relating to the revision order. Thus, pleaded DIN No. was not generated in the show cause notice and the revision order; the same was generated later and communicated to the assessee. Therefore, the SCN and revision orders are valid under the law.

The court held that the office of the PCIT was not justified in not quoting DIN even in the revision order, where a mistake was committed by it while issuing SCN to the assessee.

Counsel For Petitioner: Vartik Chokshi

Counsel For Respondent: Sudhendu Das

Case Title: M/s. Nova Properties Private Limited Versus The Pr. CIT-3

Case No.: ITA No. 109/Ahd/2022

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