Union of India Vs Smt. Aisshwarya DKS Hegde (Karnataka High Court)
Section 147A Turns Back the Clock: Karnataka HC Revives JAO Reassessment Battle, But Keeps Every Challenge Alive
Relevant Facts
In Union of India & Others v. Smt. Aisshwarya DKS Hegde, the Karnataka High Court’s Division Bench considered the Revenue’s appeal against the Single Judge’s order dated 28.08.2025 in W.P. No.26825/2024. The Single Judge had allowed the assessee’s writ petition challenging the notices issued u/s 148/148A & the consequential reassessment order passed u/s 147 of the Income-tax Act, 1961.
The underlying controversy concerned the authority of the Jurisdictional AO or JAO to initiate reassessment proceedings after introduction of the faceless assessment regime. Various High Courts had expressed divergent views on whether reassessment notices could be issued by the JAO or must necessarily emanate from the faceless mechanism contemplated u/s 151A.
The Single Judge had accepted the assessee’s challenge & quashed the reassessment proceedings on the premise that the JAO lacked the requisite authority. During pendency of the Revenue’s writ appeal, however, Parliament enacted Act No.4 of 2026, retrospectively inserting section 147A with effect from 01.04.2021.
Section 147A declares that, notwithstanding any judgment, order or decree, section 151A or any scheme framed thereunder, the AO for purposes of sections 148 & 148A means, & shall always be deemed to have meant, an officer other than the National Faceless Assessment Centre or an assessment unit referred to u/s 144B(3). This retrospective amendment altered the statutory foundation of the Single Judge’s ruling.
