Supreme Court Stays Verdict Declaring Retrospective Section 147A of Income Tax Act Unconstitutional:

The Punjab and Haryana High Court, however, held that the retrospective insertion of Section 147A did not cure the legal defect concerning the jurisdiction of officers to issue reassessment notices. The High Court observed that Parliament had not amended Section 151A or the scheme framed thereunder, including the requirement relating to automated and random allocation of cases.

Consequently, the High Court declared Section 147A unconstitutional and held that the Section 148 notices involved before it were illegal as they had not been issued through the randomised allocation and faceless mechanism prescribed under Section 151A and the March 29, 2022 scheme.

The Union Government challenged the High Court's judgment before the Supreme Court, arguing that the ruling had created uncertainty regarding the continuation of reassessment proceedings. The matter was urgently mentioned before the Chief Justice of India by Additional Solicitor General N. Venkataraman, following which the matter was taken up by the Supreme Court.

The Supreme Court has now stayed the operation of the Punjab and Haryana High Court judgment pending final adjudication of the Union Government's appeal. The Court has fixed the matter for final hearing on December 3, 2026.