Section 147A Constitutional Challenge: Bombay HC Restrains Reassessment Proceedings

Bharat Petroleum Corporation Limited Vs ACIT (Bombay High Court)

Summary: The Bombay High Court, while hearing a very large batch of writ petitions, directed Assessing Officers not to proceed further with reassessment proceedings in matters where the constitutional validity of Section 147A of the Income Tax Act, 1961 was challenged and pressed. The batch included Bharat Petroleum Corporation Limited Vs Assistant Commissioner Income-Tax-Circle 2(1)(1)-Mumbai as the first matter, Writ Petition No. 4310 of 2024. The Court recorded that all writ petitions listed on the supplementary board inter alia challenged the constitutional validity of Section 147A and that interim protection had already been granted to petitioners in a large number of these matters. The Bench had been hearing the matters on a day-to-day basis since 31 August 2026. Considering this position, the Court extended protection even to matters challenging Section 147A that were not listed with the batch, directing that Assessing Officers should not proceed further with reassessment proceedings in any such matter where the constitutional challenge was pressed.

The Court further noted that several writ petitions had been filed before different Benches challenging notices issued under Section 148 of the Income Tax Act and had been ordered to be transferred to the present Bench. Some transferred matters had not yet been renumbered, because of which the petitioners were unable to carry out amendments challenging the constitutional validity of Section 147A. The High Court therefore directed that, even in those transferred matters, the concerned Assessing Officers should not proceed with reassessment proceedings and/or recovery proceedings, as the case may be. The order thus granted interim protection across the relevant batch and connected transferred matters while the constitutional challenge to Section 147A remained under consideration.