The Andhra Pradesh High Court has declared Section 147A of the Income-tax Act, 1961, unconstitutional and set aside reassessment proceedings brought by jurisdictional assessing officers (JAOs) in the petitions before it. The reported decision challenges a retrospective amendment intended to let those officers conduct reassessment steps despite earlier rulings on faceless procedure. It does not, by itself, establish that every reassessment notice in India is cancelled.
What the High Court decided
In a batch of writ petitions reported under the name Bala Sreenivas Rao Somisetty v. ITO, a bench of Justices Ninala Jayasurya and T.C.D. Sekhar struck down Section 147A as unconstitutional. It also held that the challenged proceedings initiated by JAOs under Sections 148A and 148 were without jurisdiction, and set aside the impugned proceedings and orders in those petitions.
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TaxGuru, JurisHour and ITATonline reported the decision on October 12, 2026. The reports available as of October 13 do not establish whether a later appeal, stay or other order has changed its status. They also do not provide a court-hosted copy of the signed order. The result should therefore be understood as the reported ruling in this particular batch, not as a blanket cancellation of reassessments across India.
Why Section 147A was introduced
The faceless reassessment framework
The dispute concerns which tax officers may carry out reassessment functions, and how those functions must be allocated. Section 151A authorized the government to establish a scheme for assessment, reassessment, recomputation and related procedures. The E-Assessment of Income Escaping Assessment Scheme, 2022, notified on March 29, 2022, provided for automated allocation and faceless procedure in reassessment under Section 147 and for issuing notices under Section 148. The High Court’s reported reasoning also treated the preliminary inquiry under Section 148A as connected with issuing the Section 148 notice.
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In an earlier round, the Andhra Pradesh High Court had set aside JAO notices and orders as inconsistent with Section 151A and the 2022 scheme. Revenue appeals were pending when Parliament added Section 147A through the Finance Act, 2026, with retrospective effect from April 1, 2021. As described in the reports, the new provision defined “Assessing Officer” for Sections 148 and 148A as an officer other than the National Faceless Assessment Centre or an assessment unit, notwithstanding judgments, Section 151A or schemes made under it. The government argued that JAOs could take preliminary reassessment steps, while a later assessment could proceed facelessly.
What the Supreme Court had—and had not—decided
The Supreme Court had remitted the earlier matters for reconsideration after the amendment. It left the validity, retrospectivity and applicability of Section 147A open. The constitutional ruling reported in October 2026 is the Andhra Pradesh High Court’s decision after that remand; it should not be described as a Supreme Court ruling on Section 147A.
The court’s reasons for striking it down
The amendment did not remove the legal defect identified earlier
As reported, the High Court applied the distinction between changing a law retrospectively and simply legislating around a judicial result. A legislature may retrospectively alter the legal basis on which a court decided a case, and may validate past action if it removes or changes the defect that made that action unlawful. But the court concluded that Section 147A did not change the relevant framework in that way: Section 151A and the 2022 scheme continued to include the reassessment and Section 148 notice functions at issue.
In the court’s view, Section 147A instead sought to override judgments while leaving the underlying scheme in place. The reports say the court considered that an impermissible attempt to unsettle judicial decisions and a breach of separation of powers. The point is not that retrospective tax legislation is always invalid; the reported reasoning turns on whether the amendment actually changes the legal foundation of the earlier decision.
A separate issue: the 1961 Act had been repealed
The court also relied on commencement and repeal. The reports say it treated April 1, 2026, as the commencement date for the relevant Finance Act provisions. By then, the Income-tax Act, 1961, had been repealed and the Income Tax Act, 2025, had come into operation. Considering the 2025 Act’s repeal-and-savings clauses, the court found that inserting Section 147A into the repealed 1961 Act was legally unsustainable. This was an additional ground in the reported decision, not the only reason for the result.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does the ruling affect your reassessment notice?
Not automatically on the information established by the reports. The court set aside the challenged proceedings and orders in the petitions before it, but the sources do not say that every taxpayer with a JAO-issued notice receives the same outcome without further action. The answer in an individual case may depend on who issued each notice or order, the procedural stage, the relevant tax year, the applicable scheme and any later court order.
If you have received a notice, identify the issuing authority and stage before relying on this ruling. A notice under Section 148A is part of the preliminary process; a notice under Section 148 initiates reassessment; and a proceeding under Section 147 concerns the reassessment itself. Keep the notices, orders and dates together. Because appeal or stay status may change, confirm the current court record and get case-specific advice from a qualified Indian tax professional before deciding how to respond or whether to seek relief.
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- Check whether the documents name a JAO or a faceless authority, and distinguish the authority for each step.
- Compare the action taken with the automated allocation and faceless procedure required by the applicable scheme.
- Note the tax year, current procedural stage and any deadlines stated in the notice; the reported ruling does not itself extend an individual deadline.
- Verify whether a subsequent appeal, stay or order applies to your case. The October 12 reports do not establish the status of later proceedings as of October 13, 2026.
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