Punjab & Haryana HC Strikes Down Retrospective Section 147A Of Income Tax Act

Chandigarh, Sep 14 (KNN) The Punjab and Haryana High Court has struck down the newly inserted Section 147A of the Income Tax Act, 1961, which retrospectively sought to clarify the role of Jurisdictional Assessing Officers (JAOs) in reassessment proceedings.

A bench of Justice Deepak Sibal and Justice Rupinderjit Chahal pronounced the decision on Monday. A detailed order is awaited.

Section 147A was introduced retrospectively from April 1, 2021, providing 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.

Ruling Reopens JAO-FAO Dispute

The provision was introduced amid the long-running JAO-FAO controversy over whether reassessment notices under the post-2021 faceless assessment regime could be validly issued by JAOs or had to be routed through the National Faceless Assessment Centre.

Several High Courts, including the Punjab and Haryana High Court in Income Tax Officer, Ward 2(1), Chandigarh & Ors. v. Tej Partap Singh, had earlier quashed Section 148A(d) orders and consequential Section 148 notices issued by JAOs, holding that they did not follow the prescribed faceless mechanism.

However, some other High Courts had upheld the authority of JAOs to issue such notices, resulting in conflicting judicial views.

Supreme Court Had Remitted Cases To High Courts

The Revenue’s appeals against adverse High Court rulings were pending before the Supreme Court when Parliament introduced the retrospective Section 147A, effectively seeking to validate JAO-issued reassessment notices and override earlier rulings.

The Supreme Court subsequently remitted the batch of JAO-FAO cases to the respective High Courts for fresh consideration in light of the retrospective amendment. It directed petitioners to challenge the validity of Section 147A before the concerned High Courts.

The Punjab and Haryana High Court’s latest ruling now strikes at the validity of that retrospective legislative intervention, with the detailed reasoning expected to clarify its impact on pending reassessment proceedings.

(KNN Bureau)