8 hrs ago
High Court Strikes Down Tax Reassessment Provision After Lawyer’s Fight
Chandigarh lawyer Jyoti Sareen received a tax notice in March 2024.
She said the notice did not explain enough about why she was being reassessed.
The notice was issued by a local tax officer instead of through the government’s faceless system.
That system is designed to randomly assign cases and reduce direct contact between taxpayers and officers.
Sareen challenged the notice in court and won.
The Punjab and Haryana High Court later considered similar cases involving about 695 taxpayers.
It ruled that Section 147A of the Income Tax Act was unconstitutional.
The tax department can still reassess the taxpayers, but it must follow the required faceless process.
The Punjab and Haryana High Court declared Section 147A of the Income Tax Act unconstitutional.
The ruling quashed Section 148 reassessment notices issued to about 695 petitioners across Punjab, Haryana and Chandigarh.
The court said reassessment notices should have been issued through the faceless, randomised system required under Section 151A.
The petitioners argued Section 147A improperly attempted to override earlier court judgments without curing the underlying legal defect.
The Income Tax Department may reassess the cases, but must use the faceless system if it does so.
- Who
- Chandigarh advocate Jyoti Sareen, about 695 other petitioners, the Union government and the Income Tax Department.
- What
- The Punjab and Haryana High Court struck down Section 147A of the Income Tax Act and quashed related reassessment notices.
- Where
- The Punjab and Haryana High Court; the affected assessees are across Punjab, Haryana and Chandigarh.
- When
- The judgment was delivered on 10 September; Sareen received her notice in March 2024 and first challenged it successfully in July 2024.
- Why
- The court held that Section 147A improperly overrode earlier judgments and that the notices had not been issued through the required faceless, randomised system.
Petitioners’ position
Government’s position
Authority for reassessment notices
Petitioners’ position
The petitioners argued that Section 148 notices had to be issued through the faceless, randomised system notified under Section 151A, rather than by jurisdictional officers.
Government’s position
The Union government argued that jurisdictional officers retained authority, including through two 2014 notifications, and that this power had never been withdrawn.
Validity of Section 147A
Petitioners’ position
The petitioners said Section 147A was not a genuine clarification but an attempt to override earlier court judgments without changing the underlying law.
Government’s position
The government argued that Section 147A was needed to provide certainty and end ongoing litigation.
Effect of the new provision
Petitioners’ position
The court held that Section 147A did not cure the defect identified in Section 151A or the faceless scheme and therefore could not simply negate previous rulings.
Government’s position
The government sought to preserve the reassessment notices and the authority of jurisdictional officers, but the court rejected those arguments.
Key facts
- Court
- Punjab and Haryana High Court
- Judgment date
- 10 September
- Provision struck down
- Section 147A of the Income Tax Act, 1961
- Notices quashed
- Section 148 reassessment notices
- Affected petitions
- Approximately 695 connected petitions
- Required process
- Faceless, randomised allocation under Section 151A and the 2022 scheme
- Further reassessment
- The department may reassess the cases through the faceless system
Sources
Related news
Punjab and Haryana High Court Strikes Down Retrospective Tax Reassessment Provision
ITAT Quashes Reassessment Over Rs 41.45 Lakh Deposits
₹5.31 lakh ITAT Delhi refund allowed despite missing original return
Jaipur ITAT Upholds 87A Rebate on STCG for AY 2024-25
Bengaluru ITAT Overturns Tax Demand After Consultant's Regime Error
Supreme Court Sets Aside Tata Steel’s ₹1,007 Crore GST Notice
Ambala-Shamli Expressway Reaches 70% Completion, Cuts Travel Time
Punjab’s Drug Challenge Shifts From Heroin To Pharmaceutical Smuggling
Delhi Police Arrest Three Over Anti-BRICS, Pro-Khalistan Graffiti
Haryana CM Claims Punjab Discontent With AAP Government