In a significant ruling, the Bombay High Court has quashed a backdated rectification order passed under Section 154 of the Income-tax Act on the ground that it was issued manually without quoting a Document Identification Number (DIN). While allowing the writ petition filed by Siemens Ltd., the Court observed that the Respondent, in an attempt to protect himself, had backdated and manually passed the impugned order only to overcome the bar of limitation.

The High Court examined in detail the importance and object behind the introduction of DIN through the CBDT Circular dated 14.08.2019. It held that the Circular was issued to ensure that a proper and complete audit trail is maintained in respect of every notice, order, summons, letter, or correspondence issued by the Income-tax Department on or after 01.10.2019. The Court categorically held that failure to generate and quote a DIN cannot be treated as a mere procedural irregularity that can be ignored.

The Court further held that where an order is manually passed without quoting a DIN on the face of the order, the subsequent issuance of a separate letter furnishing the DIN does not cure or validate the defect. Such post-facto compliance defeats the very object of the CBDT Circular.

On this issue, the Bombay High Court expressly departed from the reasoning adopted by the Jharkhand High Court in Prakash Lal Khandelwal v. CIT (2023) 151 taxmann.com 72 (Jha.). The Bombay High Court observed that the Jharkhand High Court failed to appreciate the true scope of the term “communication” used in the CBDT Circular by holding that DIN was mandatory only at the time of communication and not at the time of issuance of the order. According to the Bombay High Court, such an interpretation overlooks the clear mandate of the Circular, which requires DIN to be generated and quoted on the document itself at the time of its issuance.

The High Court also laid down an important principle regarding judicial precedents. It clarified that merely because the Supreme Court has stayed certain DIN-related judgments of the Delhi High Court, Calcutta High Court, and Madras High Court, it does not mean that those judgments have lost their precedential value.

On multiple grounds, including the backdating of the order, violation of the CBDT DIN Circular, and the absence of DIN on the impugned rectification order, the Bombay High Court quashed the Section 154 rectification order in its entirety.

Held: In favour of the assessee.

Case: Siemens Ltd. v. DCIT
Citation: [TS-1628-HC-2025(BOM)]
Date of Judgment: 02.12.2025 (Bombay High Court)