Punjab HC strikes down Income Tax Act's Section 147A as unconstitutional
New Delhi, Sep 10, 2026
The Punjab and Haryana High Court has struck down Section 147A of the Income Tax Act as unconstitutional, affecting rules on who can issue reassessment notices under the faceless tax system
The Punjab and Haryana High Court struck down the newly inserted Section 147A of the Income Tax Act, 1961, as unconstitutional, LiveLaw reported. The provision retrospectively clarified the role of the Jurisdictional Assessing Officer (JAO) in income tax reassessment proceedings.
A Bench of Justice Deepak Sibal and Justice Rupinderjit Chahal delivered the ruling on Wednesday. A detailed order is yet to be released.
What did the court rule?
Section 147A was introduced with retrospective effect from April 1, 2021. It states that, for the purposes of Sections 148 and 148A, the term “Assessing Officer” would mean an Assessing Officer other than the National Faceless Assessment Centre.
The provision was introduced against the backdrop of a long-running dispute over whether reassessment notices under the faceless assessment system could be issued by Jurisdictional Assessing Officers or had to be issued through the National Faceless Assessment Centre.
Why was there a dispute over JAOs?
After the post-2021 faceless assessment system came into force, several taxpayers challenged reassessment proceedings initiated by JAOs.
Several high courts, including the Punjab and Haryana High Court in Income Tax Officer, Ward 2(1), Chandigarh & Ors. vs Tej Partap Singh, had held against the Revenue in such cases. The courts quashed orders passed under Section 148A(d) and the subsequent notices issued under Section 148, holding that the proceedings should have been handled through the prescribed faceless mechanism, the news report said.
However, some other high courts took a different position and upheld the authority of JAOs to initiate such reassessment proceedings.
What did the retrospective amendment do?
The Revenue challenged the adverse high court rulings before the Supreme Court. While these appeals were pending, Parliament inserted Section 147A with retrospective effect.
The amendment sought to clarify that JAOs, and not just the National Faceless Assessment Centre, could act as the Assessing Officer for proceedings under Sections 148 and 148A. This was seen as an attempt to provide legislative backing to reassessment notices issued by JAOs and overcome the high court rulings that had earlier struck down such proceedings, LiveLaw reported.
The Supreme Court subsequently sent the batch of JAO-FAO cases back to the respective high courts for fresh consideration in view of the retrospective insertion of Section 147A.
The top court also directed the petitioners to challenge the validity of the retrospective legislative amendment before the respective high courts.
What is Section 147A of the Income Tax Act, 1961?
Section 147A was inserted into the Income Tax Act, 1961, with retrospective effect from April 1, 2021. Its purpose was to clarify who could act as the "Assessing Officer" for reassessment proceedings under Sections 148 and 148A.
The provision specifies that the term "Assessing Officer" in these sections refers to an Assessing Officer other than the National Faceless Assessment Centre.
In simple terms, Section 147A was intended to make it clear that reassessment proceedings could be handled by the taxpayer's Jurisdictional Assessing Officer rather than being restricted to the National Faceless Assessment Centre.
The provision became important because several court rulings had questioned whether JAOs had the authority to issue reassessment notices under the faceless assessment framework introduced from April 1, 2021.
By making the provision retrospective, Parliament sought to cover proceedings dating back to April 1, 2021. The Punjab and Haryana High Court's latest ruling, however, has struck down this provision.
[The Business Standard]
