Nate Nandha Vs ACIT (Madras High Court)
The writ petitions challenged proceedings under Sections 148A, 148 and/or 147 of the Income Tax Act, 1961, as applicable between 01.04.2021 and 01.04.2024. In some petitions, penalties imposed under Chapter XXI of the Act were also challenged. The petitioners had obtained interim orders primarily on the ground that the Jurisdictional Assessing Officer lacked jurisdiction under Section 148A, relying mainly on the Bombay High Court decision in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax. Before these petitions were heard, the Revenue had challenged that decision before the Supreme Court. During the pendency of those proceedings, Section 147A was inserted by the Finance Act, 2026 with retrospective effect from 01.04.2021.
The Court noted that it had earlier independently considered the issue in Ontivillu Gopidoss Jothilakshmi vs The Income Tax Officer and Another and held that the Jurisdictional Assessing Officer had jurisdiction, despite a similar challenge based on the Hexaware Technologies decision.
The Court further referred to the Supreme Court’s order in Income Tax Officer and Others vs Tej Partap Singh dated 10.04.2026. The Supreme Court set aside High Court judgments that had quashed reassessment notices on the ground that Jurisdictional Assessing Officers lacked competence, observing that the legislative amendment had altered the foundation of those decisions. The matters were remitted to the respective High Courts for fresh consideration. The Supreme Court granted assessees liberty to amend their writ petitions to challenge Section 147A, as introduced by the Finance Act, 2026, or any connected or consequential provision, and permitted the Revenue to file written submissions and affidavits. It clarified that it had expressed no opinion on the validity, scope, effect, retrospectivity or applicability of the amended provisions, leaving those questions open for the High Courts. It also directed that interim stay of further assessment or reassessment proceedings would continue during the pendency of the writ petitions, subject to conditions imposed by the High Courts.
