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Punjab & Haryana HC Strikes Down Retrospective Section 147A; Quashes JAO-Issued Reassessment Notices

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5-Second Takeaway : The Punjab and Haryana High Court declared the newly inserted Section 147A of the Income-tax Act unconstitutional for violating the separation of powers. The Court reaffirmed that reassessment notices must exclusively be issued by Faceless Assessing Officers through automated allocation


Sections: Income-tax Act, 1961, ss. 144B, 147A, 148, 148A & 151A

Source & Citation

CaseJyoti Sareen Vs. Union of India and others

Court / BenchTHE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Decision date2026-09-10

SectionsIncome-tax Act, 1961, ss. 144B, 147A, 148, 148A & 151A

Publication statusTo be published soon

Facts of the Case: The assessee received a reassessment notice from her Jurisdictional Assessing Officer (JAO) which she successfully challenged in the High Court for violating the mandatory faceless assessment scheme. While the Revenue’s appeal was pending before the Supreme Court, the legislature retrospectively enacted a new provision to validate JAO-issued notices, expressly overriding court judgments and existing faceless scheme rules. Consequently, the Supreme Court remanded the matter back to the High Court to test the constitutional validity of this newly inserted legislative override.

Issue: Whether the retrospective enactment of a provision designed to validate JAO-issued reassessment notices by overriding judicial decisions—without amending the underlying faceless assessment mandate—is constitutionally valid?

Held :

  • The Court struck down the newly enacted provision as unconstitutional, ruling that the legislature cannot directly annul judicial decisions without removing or curing the statutory defect that formed the basis of those judgments.

  • Because the underlying statutory mandate requiring randomized automated allocation was left unamended, the retrospective legislative "clarification" was deemed an impermissible legislative overreach  that violates the doctrine of separation of powers.

  • Consequently, the Court quashed the impugned reassessment notices, reiterating that such notices can only be legally issued in a faceless manner