S. 147A : Reassessment-Face less Assessment-Assessing Officer for the purposes of sections 148, 148A-Constitutional validity Constitutional validity-Retrospective amendment-Jurisdiction of Jurisdictional Assessing Officer (JAO)-Faceless assessment -Section 147A inserted by the Finance Act, 2026, with retrospective effect from 1-4-2021, clarifying that the Assessing Officer for the purposes of sections 148 and 148A shall mean an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit-Amendment held unconstitutional and struck down. [S. 120, 124, 127, 130, 144B, 147, 148, 148A(b), 148A(d), 151A, Income-Tax Act, 2025, S. 532,,536(2)(c), General Clauses Act, 1897, S. 5, Art. 14, 19(1)(g), 226, 265]
The scheme notified under section 151A, namely the e-Assessment of Income Escaping Assessment Scheme, 2022, expressly provided for automated allocation and faceless proceedings in relation to reassessment and issuance of notice under section 148. The Revenue admitted that no arrangement had been made for automated allocation of cases and that the cases were identified by the JAOs themselves. The Court held that the statutory scheme was mandatory; the use of the word “shall” excluded the exercise of jurisdiction by JAOs contrary to the scheme. The purpose of the scheme was to eliminate personal interface between the assessee and tax authorities and to ensure efficiency, transparency and accountability. Permitting JAOs to initiate reassessment proceedings would defeat that legislative objective. The Court further held that section 147A was introduced to overcome judgments of various High Courts holding that JAOs lacked jurisdiction to issue notices under sections 148A and 148. However, the Legislature had not amended section 151A or the scheme framed thereunder to remove the basis of those judicial decisions. A validating enactment may operate retrospectively, but the Legislature must remove the defect identified by the Court; it cannot simply nullify judicial decisions by inserting an overriding provision. The Court held that introducing section 147A without amending the existing scheme amounted to legislative overreach and was contrary to the doctrine of separation of powers, which forms part of the basic structure of the Constitution. The Court also held that section 147A was unsustainable because the Income-tax Act, 1961 stood repealed with effect from 1-4-2026, while the Finance Act, 2026 expressly provided that the relevant provisions would come into force on 1-4-2026. Applying section 5 of the General Clauses Act, 1897 and the Supreme Court judgment in Common Cause v. Union of India, (2003) 8SCC 250 ,the Court held that where an enactment expressly specifies its commencement date, it comes into force on that date and not merely on the date of Presidential assent. Consequently, the insertion of section 147A into the repealed Income-tax Act, 1961 was held to be legally unsustainable and without legal sanctity. The Court declared section 147A unconstitutional and struck it down. All impugned proceedings initiated by JAOs under sections 148A and 148 were held to be without jurisdiction and were set aside. Writ petitions were allowed.(W.P. No. 28520 of 2023 and batch dt. 12-10-2026)
Bala Sreenivas Rao Somisetty & Ors v. ITO (AP)(HC) [www.itatonline.org]
[Coram : The Honourable Sri Justice Ninala Jayasurya and The Honourable Sri Justice T.C.D. Sekhar]