Registration cancellation order without DIN number declared invalid and void under section 12AB(4)

ITAT Delhi held that an order cancelling registration under section 12AB(4) passed without a DIN number is invalid and non est. The tribunal ruled that Board circulars are binding on tax authorities and non-compliance with mandatory circular requirements renders orders void. The court rejected the department's attempt to distinguish facts on sub silentio principle, emphasizing this was purely a question of law regarding mandatory compliance. The subsequent validation argument was also rejected as no material showed DIN generation, and without DIN inscription on the order itself, it cannot be considered valid. The assessee's appeal was allowed and the impugned order was set aside.

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ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

• Whether the absence of a Document Identification Number (DIN) on the order for cancellation of registration under Section 12AB(4) of the Income Tax Act, 1961, renders the order invalid.
• Whether the Central Board of Direct Taxes (CBDT) Circular No. 19/2019, which mandates the generation and quoting of a DIN on communications issued by the Income Tax Department, is binding and applicable to the case.
• Whether the subsequent generation of a DIN can validate an order that was initially issued without one.
• The applicability of the principle of sub silentio in distinguishing the facts of the present case from previous judgments.

ISSUE-WISE DETAILED ANALYSIS

1. Absence of DIN on the Order

The legal framework revolves around the requirement set by the CBDT Circular No. 19/2019, which mandates that all communications from the Income Tax Department must include a DIN. The Court examined whether the absence of a DIN on the order dated 31.03.2023 for cancellation of registration under Section 12AB(4) invalidated the order.

The Court referred to its previous decision in the case of Abhinav Chaturvedi, which emphasized that the absence of a DIN renders an order non-est, meaning it is deemed never to have been issued. The Court found that the order in question did not bear a DIN and thus failed to comply with the mandatory requirements of the Circular.

2. Binding Nature of the CBDT Circular No. 19/2019

The Court considered whether the Circular is merely for internal control or if it imposes binding obligations on the tax authorities. The Court concluded that the Circular is binding, as it is issued under Section 119 of the Income Tax Act, which empowers the CBDT to issue such directives. The Court cited the Delhi High Court's decision in Geep Industrial Syndicate, affirming that Circulars of the Board are binding on tax authorities.

3. Subsequent Generation of DIN

The Court examined whether the subsequent generation of a DIN could validate an order initially issued without one. The Court referred to the Abhinav Chaturvedi case, which held that the generation of a DIN after the issuance of an order does not rectify the initial defect. The Court found no evidence that a DIN was generated at any stage for the order in question, reinforcing its non-est status.

4. Principle of Sub Silentio

The Court addressed the argument that the principle of sub silentio could distinguish the present case from the Brandix Mauritius Holdings judgment. The Court rejected this contention, stating that the issue at hand is purely a question of law regarding the non-compliance with a mandatory Circular. The Court reaffirmed the applicability of the Brandix Mauritius Holdings decision, which supports the invalidity of orders issued without a DIN.

SIGNIFICANT HOLDINGS

The Court held that the absence of a DIN on the order for cancellation of registration under Section 12AB(4) renders the order invalid. The Court emphasized the binding nature of the CBDT Circular No. 19/2019, stating:

"The Circulars of the Board are binding on the tax authorities."

The Court also reiterated that subsequent actions, such as the generation of a DIN after the fact, do not validate an order issued without one. The Court concluded that the principle of sub silentio does not apply in this context, as the issue is a clear question of law.

The appeal of the assessee was allowed, and the impugned assessment order was set aside as non-est.

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