{
  "id": 8245044,
  "title": "SC stays high court order striking down provision on income tax reassessment process",
  "url": "https://urgent.news/2026/09/18/sc-stays-high-court-order-striking-down-provision-on-income-tax",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-18T12:16:17.000Z",
  "source": {
    "name": "Live Mint",
    "slug": "live-mint",
    "url": "https://www.livemint.com/news/sc-stays-high-court-order-striking-down-provision-on-income-tax-reassessment-process-11789729297075.html"
  },
  "original_language": "en",
  "account": "The Supreme Court has stayed a Punjab and Haryana High Court order that had invalidated a provision in the Income-Tax Act concerning reassessment proceedings. A five-member bench, comprising Justices JB Pardiwala and K. Vinod Chandran, maintained the stay conditionally, restricting further assessment and reassessment proceedings until the main matter is decided. The matter is scheduled for final hearing on December 3. Additional Solicitor General N. Venkataraman had previously informed the court that the High Court's decision had created significant confusion in the tax department’s reassessment process. The core issue revolved around whether regular assessing officers could issue reassessment notices or if such notices must be issued through the automated faceless assessment system. This contention emerged after the tax department transitioned to the faceless system for various assessment and reassessment cases. Under this system, cases are allocated electronically, and taxpayers interact primarily with tax authorities online rather than directly with local tax officers. The government implemented this system to minimize personal interactions between taxpayers and tax officials. The CBDT had notified a scheme under Section 151A on March 29, 2022, for faceless assessment and reassessment. However, many cases continued to receive reassessment notices from regular JAOs. Taxpayers contested these notices in multiple High Courts, arguing that reassessment proceedings should adhere to the faceless system. Rulings varied across different courts, with some permitting JAOs to issue notices and others requiring the faceless system. Section 147A of the Income Tax Act clarified that traditional local tax officers, following the conventional, non-automated system, retained authority to manage reassessment under Sections 148 and 148A. The controversy began when Chandigarh lawyer Jyoti Sareen filed her 2020-21 income-tax return in September 2020, and her local tax officer issued a Section 148 notice seeking to reopen her assessment in March 2024. Sareen contested the notice in the Punjab and Haryana High Court, claiming her regular tax officer could not issue the notice and it should have proceeded through the faceless system. The high court overturned Sareen's reassessment notice in July 2024, stating the process had not followed the faceless scheme. This decision prompted numerous taxpayers to challenge similar notices. The High Court subsequently addressed over 500 related petitions. Meanwhile, Parliament enacted Section 147A through the Finance Act of 2026, with retroactive application from April 1, 2021, to clarify that regular assessing officers could handle reassessment proceedings and that their issued notices could not be invalidated solely because of the faceless assessment system. Taxpayers argued that the amendment did not resolve the legal issues highlighted by the courts. The Punjab and Haryana High Court subsequently struck down Section 147A, contending that Parliament could not retrospectively validate an earlier legal stance when constitutional courts had already deemed the procedure defective.",
  "summary": "The Centre had earlier told the Supreme Court that the high court ruling had created a “huge vacuum” in the reassessment process of the tax department.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}