ITO Vs Sujatha Ramesh (Karnataka High Court)
The Karnataka High Court allowed a batch of writ appeals filed by the Revenue and remanded the matters to the learned Single Judge for fresh consideration in light of subsequent developments concerning the retrospective insertion of Section 147A into the Income Tax Act. The appeals arose from orders of the learned Single Judge that had allowed writ petitions challenging notices issued under Sections 148 and 148A of the Income Tax Act and reassessment orders passed under Section 147.
During the hearing, both parties brought to the Court’s notice an order of the Supreme Court dated 10.04.2026 in Civil Appeal No. 4716 of 2026. The Supreme Court had considered an amendment introducing Section 147A into the Income Tax Act with retrospective effect from 01.04.2021. The newly inserted provision clarified that, for the purposes of Sections 148 and 148A, the “Assessing Officer” means an officer other than the National Faceless Assessment Centre (NFAC) or any assessment unit referred to in Section 144B. The Supreme Court noted that Parliament had enacted the amendment retrospectively to address divergent views expressed by various High Courts concerning the competence of authorities initiating reassessment proceedings.
The Supreme Court had observed that assessees would be entitled to challenge the amending provisions before the jurisdictional High Courts and that all available contentions could be raised before those courts. Since several High Courts had quashed reassessment notices on the ground that Jurisdictional Assessing Officers lacked authority to initiate such proceedings, and because the legislative amendment altered the foundation of those decisions, the Supreme Court set aside the judgments in favour of the assessees and remitted the matters to the respective High Courts for fresh consideration. The Supreme Court also granted liberty to assessees to amend their writ petitions and challenge Section 147A or any connected provisions. Further, it directed that an interim stay on further assessment or reassessment proceedings would continue during the pendency of the writ petitions before the High Courts.
