The Punjab and Haryana High Court has declared Section 147A of the Income Tax Act, 1961, unconstitutional, challenging the government’s efforts to streamline faceless reassessment procedures amid ongoing legal controversies.
The Punjab and Haryana High Court has invalidated Section 147A of the Income Tax Act, 1961, in a blow to the government’s attempt to settle a dispute over who may reopen tax assessments under the faceless regime, according to the Free Press Journal. The provision had been inserted retrospectively from April 1, 2021, to clarify that jurisdictional assessing officers could continue to act in reassessment cases.
The dispute arose after the faceless assessment framework began in 2021, when taxpayers challenged reassessment notices issued by local assessing officers rather than through the National Faceless Assessment Centre. Some courts had already sided with taxpayers, while others had accepted the Revenue’s view, leaving the law unsettled. The Punjab and Haryana bench, led by Deepak Sibal and Rupinderjit Chahal, delivered its order on Wednesday, although the detailed judgment is still awaited, the Free Press Journal reported.
But the legal picture has continued to shift. PwC said the Supreme Court later sent the reassessment disputes back to the high courts after the Finance Act, 2026, inserted Section 147A retrospectively, and gave taxpayers four weeks to amend their petitions so they could directly challenge the amendment’s validity. TaxGuru reported that the apex court did not itself rule on whether reassessment notices issued by jurisdictional assessing officers were lawful, instead remitting the matters for fresh consideration in light of the new provision.
Recent Punjab and Haryana High Court orders from August 2026 suggest the controversy is still moving through the courts. CaseMine reported that Justice Deepak Sibal dismissed at least two petitions with liberty to file fresh challenges that specifically question Section 147A itself. That means the broader fight over reassessment powers, faceless procedure and Parliament’s use of retrospective tax legislation remains unresolved despite the latest setback for the provision.
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