VIJAYAWADA: The High Court on Monday declared Section 147A of the Income Tax Act, 1961, unconstitutional, ruling that reassessment notices must be issued through the prescribed faceless mechanism.
A division bench of Justices Nainala Jayasurya and Thoota Chandra Dhanasekhar delivered the judgment while hearing petitions challenging the provision, introduced through a Central government amendment to allow jurisdictional assessing officers (JAOs) to issue reassessment notices directly.
The bench quashed proceedings initiated by JAOs under Sections 148 and 148A, holding that they had acted beyond their jurisdiction. It said notices concerning income escaping assessment and subsequent reassessment proceedings must follow faceless mechanism prescribed under Section 151A.
The petitioners argued that Section 147A violated the rule of law and separation of powers and infringed taxpayers’ rights. They contended that direct notices by JAOs contradicted the faceless assessment framework.
The Income Tax Department argued that an August 28, 2022, notification did not clearly specify whether notices should be issued by the National Faceless Assessment Centre or jurisdictional of ficers.
Rejecting this argument, the bench said Section 147A could not bypass earlier rulings without formally amending Section 151A or the faceless assessment scheme.