Archive · 11 Sep 2026
Punjab and Haryana High Court Strikes Down Retrospective Tax Reassessment Provision
The court examined a tax rule called Section 147A.
The rule said local tax officers could conduct certain reassessment proceedings instead of the national faceless tax centre.
It was applied from April 1, 2021, even though it was introduced later.
Taxpayers said reassessment notices should have been issued through an automated and faceless process.
They also argued that the new rule could not override the existing legal procedure.
The Punjab and Haryana High Court has now declared Section 147A unconstitutional.
This does not automatically cancel every reassessment notice.
Courts will still need to examine whether each notice followed the required procedure, and the detailed judgment is awaited.
The Punjab and Haryana High Court declared Section 147A of the Income Tax Act unconstitutional.
Section 147A was introduced retrospectively from April 1, 2021, to clarify the authority of Jurisdictional Assessing Officers.
Taxpayers argued that reassessment notices should follow the automated, faceless allocation process under Section 151A and its scheme.
The ruling does not automatically invalidate every reassessment; the prescribed statutory and faceless procedures remain relevant.
The court’s order was delivered by Justices Deepak Sibal and Rupinderjit Chahal, while detailed reasons are awaited.
- Who
- The Punjab and Haryana High Court, taxpayers, Jurisdictional Assessing Officers, the Revenue, and the National Faceless Assessment Centre are involved.
- What
- The court struck down Section 147A of the Income Tax Act, declaring it unconstitutional.
- When
- The order was delivered on Wednesday; Section 147A was given retrospective effect from April 1, 2021.
- Where
- The ruling was issued by the Punjab and Haryana High Court.
- Why
- The case concerned whether Jurisdictional Assessing Officers could issue reassessment notices or whether the statutory faceless and automated allocation process was required.
Taxpayers’ Position
Revenue’s Position
Who can issue reassessment notices?
Taxpayers’ Position
Taxpayers argued that reassessment notices had to be issued through the automated, faceless allocation mechanism under Section 151A and the related scheme.
Revenue’s Position
The Revenue supported the authority of Jurisdictional Assessing Officers, with Section 147A intended to clarify that the relevant Assessing Officer was not the National Faceless Assessment Centre or its assessment units.
Effect of the retrospective amendment
Taxpayers’ Position
Taxpayers contended that Section 147A could not retrospectively override the existing provisions and faceless assessment scheme or nullify earlier judicial decisions.
Revenue’s Position
The amendment was introduced retrospectively to provide legislative support to reassessment notices issued by Jurisdictional Assessing Officers and address concerns raised by courts.
Impact on existing reassessments
Taxpayers’ Position
Taxpayers may receive relief where notices were issued without the required automated allocation or faceless procedure.
Revenue’s Position
The ruling does not automatically invalidate every reassessment, because the compliance of each notice with the prescribed statutory procedure remains relevant.
- 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
- Main dispute
- Whether Jurisdictional Assessing Officers could issue reassessment notices outside the prescribed faceless mechanism
- Related provisions
- Sections 148, 148A and 151A of the Income Tax Act
- Judgment status
- The detailed judgment is awaited
