High Court Strikes Down Section 147A Voiding Reassessment Notices Issued by Jurisdictional Officers

1. Core Facts & Background

• The central government established statutory frameworks under Section 151A and the e-Assessment of Income Escaping Assessment Scheme, 2022, mandating faceless reassessment proceedings.
• Despite statutory mandates for automated case allocation and faceless reassessments, physical notices under Section 148A were initiated by Jurisdictional Assessing Officers.
• The court had previously set aside such notices for violating Section 151A, after which the legislature introduced Section 147A with retrospective effect to clarify that assessing officers under Sections 148 and 148A mean officers other than faceless units.
• The assessees filed fresh writ petitions challenging the constitutional validity of the newly inserted retrospective Section 147A.

2. Revenue / Department’s Action

• Revenue issued notices under Sections 148A and 148 through Jurisdictional Assessing Officers on the grounds that taxable income had escaped assessment.
• Revenue argued that the statutory scheme demarcated pre-assessment enquiry from the actual assessment process, asserting that faceless assessment units were never intended to conduct pre-enquiry procedures.
• Revenue contended that the relevant notification dealt only with post-notice procedures and did not expressly confer power on faceless officers to issue pre-assessment notices.
• Revenue relied on the newly introduced retrospective legislative amendment under Section 147A to validate reassessment notices issued by territorial officers.

3. Assessee’s Defense & Arguments

• The assessee argued that the Jurisdictional Assessing Officers lacked jurisdiction to issue notices under Sections 148 and 148A post the enactment of Section 151A.
• The assessee highlighted that the legislative intent was to eliminate personal interface, promote transparency, and implement automated technology-driven allocation.
• The assessee maintained that retrospective insertion of Section 147A was a direct attempt to overturn judicial rulings without altering the underlying legal basis.
• The assessee asserted that the amendment violated the doctrine of separation of powers, which forms part of the basic structure of the Constitution.

4. Final Ruling & Outcome

• The court declared Section 147A unconstitutional and struck it down for attempting to overreach judicial decisions without amending the operative scheme framed under Section 151A.
• The court held that reassessment procedures and notice issuance must strictly comply with automated allocation mechanisms rather than arbitrary identification by local officers.
• Consequently, all reassessment notices and proceedings initiated by Jurisdictional Assessing Officers under Sections 148A and 148 were quashed as lacking jurisdiction.