2 hrs ago
Punjab And Haryana High Court Strikes Down Tax Reassessment Provision
The court examined a rule called Section 147A in the Income Tax Act.
This rule said certain local tax officers could handle some cases instead of a national online tax center.
The rule was applied starting from April 1, 2021, even though it was added later.
Some taxpayers argued that the local officers had not followed the required faceless process.
Different high courts reached different conclusions about who had the power to act.
The Supreme Court sent the cases back to the high courts for another look.
The Punjab and Haryana High Court has now said Section 147A is unconstitutional.
The detailed reasons for the decision have not yet been released.
The Punjab and Haryana High Court declared Section 147A of the Income Tax Act unconstitutional.
Section 147A was introduced retrospectively from April 1, 2021, concerning reassessment authority.
The provision clarified that Assessing Officers could act instead of the National Faceless Assessment Centre.
The ruling follows differing high court decisions over reassessment notices issued by Jurisdictional Assessing Officers.
The Supreme Court had allowed petitioners to challenge Section 147A after sending related cases back to high courts.
- Who
- The Punjab and Haryana High Court, taxpayers, Jurisdictional Assessing Officers, and the Revenue are involved.
- What
- The court struck down Section 147A of the Income Tax Act, declaring it unconstitutional.
- Where
- The ruling was issued by the Punjab and Haryana High Court.
- When
- The order was delivered on Wednesday; the provision had retrospective effect from April 1, 2021.
- Why
- The provision addressed disputes over whether Jurisdictional Assessing Officers or the National Faceless Assessment Centre could conduct reassessment proceedings.
Taxpayers' Position
Revenue's Position
Who can conduct reassessment proceedings?
Taxpayers' Position
Taxpayers challenged reassessment actions by Jurisdictional Assessing Officers, arguing that the prescribed faceless mechanism should have been followed.
Revenue's Position
The Revenue supported the authority of Jurisdictional Assessing Officers to initiate reassessment proceedings, and Section 147A was introduced to provide legislative support for those actions.
Effect of the retrospective amendment
Taxpayers' Position
Petitioners were allowed to challenge the validity of the retrospective provision after the related cases returned to the high courts.
Revenue's Position
The amendment was intended to clarify the law and address court concerns about reassessment notices issued from April 1, 2021.
Judicial interpretation
Taxpayers' Position
Some high courts, including the Punjab and Haryana High Court, had previously ruled against reassessment proceedings conducted outside the prescribed faceless mechanism.
Revenue's Position
Other high courts had upheld the authority of Jurisdictional Assessing Officers, producing differing interpretations before the latest ruling.
Key facts
- Provision challenged
- Section 147A of the Income Tax Act, 1961
- Court ruling
- Section 147A was declared unconstitutional
- Retrospective date
- April 1, 2021
- Bench
- Justice Deepak Sibal and Justice Rupinderjit Chahal
- Issue
- Authority to conduct reassessment proceedings
- Relevant sections
- Sections 148 and 148A of the Income Tax Act
- Status of judgment
- The detailed judgment is awaited
Sources
Related news
ITAT Quashes Reassessment Over Rs 41.45 Lakh Deposits
Jaipur ITAT Upholds 87A Rebate on STCG for AY 2024-25
Delhi High Court Halts Processing of Judges' Income Tax Returns
High Court Sets Aside Chandigarh Police Promotion Rules
₹5.31 lakh ITAT Delhi refund allowed despite missing original return
Bengaluru ITAT Overturns Tax Demand After Consultant's Regime Error
Supreme Court Examines Calls to Revise Legal Education
Supreme Court Upholds Maharashtra Law Seat Cuts, Waives Cost
Supreme Court Clears Arrest of Abhishek Banerjee Aide
Supreme Court Seeks Response On Nationwide Child Trafficking Mechanism
