Punjab And Haryana HC Strikes Down Section 147A Of Income Tax Act As Unconstitutional
· Free Press Journal
The Punjab and Haryana High Court has struck down Section 147A of the Income Tax Act, 1961, declaring the provision unconstitutional. The section was introduced retrospectively from April 1, 2021, to clarify the authority of Jurisdictional Assessing Officers (JAOs) in income tax reassessment proceedings.
A Bench comprising Justice Deepak Sibal and Justice Rupinderjit Chahal delivered the order on Wednesday, though the detailed judgment is awaited.
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Section 147A was inserted after disputes emerged over whether reassessment notices under the faceless assessment framework could be issued by JAOs or only through the National Faceless Assessment Centre.
The provision stated that for proceedings under Sections 148 and 148A of the Income Tax Act, the term “Assessing Officer” would refer to an officer other than the National Faceless Assessment Centre.
Income Tax, Registration Departments Join Hands For Data-Driven GovernanceAfter the faceless assessment system came into effect in 2021, several taxpayers challenged reassessment actions initiated by JAOs. Some high courts, including the Punjab and Haryana High Court, had earlier ruled against the Revenue, holding that such proceedings should have followed the prescribed faceless mechanism.
However, other high courts upheld the authority of JAOs to initiate reassessment proceedings, creating differences in judicial interpretation.
Section 147A amendment and legal challenge
The retrospective amendment was introduced while appeals against earlier high court rulings were pending before the Supreme Court. The move was aimed at providing legislative support to reassessment notices issued by JAOs and addressing concerns raised by courts.
The Supreme Court later sent the related cases back to high courts for fresh consideration following the introduction of Section 147A and allowed petitioners to challenge the validity of the amendment.
Section 147A was intended to establish that reassessment proceedings could be conducted by Jurisdictional Assessing Officers instead of being limited to the National Faceless Assessment Centre.
The latest ruling by the Punjab and Haryana High Court has now invalidated that provision, affecting the legal position on reassessment proceedings carried out since April 1, 2021.