1. Title of the Case
| Case Title | Bala Sreenivas Rao Somisetty v. Income Tax Officer, Ward 1, Eluru & Others (lead case, with batch of writ petitions) |
| Case Number | WP No. 28520 of 2023 and batch (WP Nos. 8527 of 2024 etc.); Common Order |
| Court and Bench | High Court of Andhra Pradesh at Amaravati; Hon’ble Sri Justice Ninala Jayasurya and Hon’ble Sri Justice T.C.D. Sekhar (common order authored by Justice T.C.D. Sekhar) |
| Date of Order | 12.10.2026 (date of pronouncement; reserved on 22.09.2026/23.09.2026) |
| Relevant Provisions | Income Tax Act, 1961: Sections 127, 130, 144B, 147, 147A, 148, 148A and 151A; Finance Act, 2026 (Act 4 of 2026), Sections 2(a) and 9; e-Assessment of Income Escaping Assessment Scheme, 2022 (Notification No. 18/2022 dated 29.03.2022, S.O. 1466(E)); Faceless Jurisdiction of Income-Tax Authorities Scheme, 2022 (Notification No. 15 of 2022 dated 28.03.2022); Notification No. 61 of 2022 dated 10.06.2022; Income Tax Act, 2025, Section 536; General Clauses Act, 1897, Section 5; Articles 14, 19(1)(g) and 265 of the Constitution |
2. Summary of the Judgment
Facts of the Case. The petitioners challenged notices and orders under Sections 148A and 148, and consequential reassessment orders, issued by Jurisdictional Assessing Officers (JAOs) instead of in a faceless manner under the e-Assessment of Income Escaping Assessment Scheme, 2022 framed under Section 151A (paras 2, 6-8). A coordinate Bench quashed such notices on 28.10.2025 (para 10). While the Revenue’s SLPs were pending, Finance Act, 2026 inserted Section 147A, retrospectively from 01.04.2021, defining “Assessing Officer” for Sections 148 and 148A to exclude NFAC (para 11). The Supreme Court on 10.04.2026 remitted the matters, with liberty to challenge Section 147A (paras 12-13).
Issues for Determination. (i) Whether JAOs could issue notices under Sections 148A and 148 once Section 148 was included in the faceless Scheme (paras 14, 20-23); (ii) whether Section 147A validly removes the basis of the earlier judgments or merely overreaches them, offending separation of powers (paras 14, 24-26, 42); and (iii) whether Section 147A could be inserted into the 1961 Act by the Finance Act, 2026 when that Act stood repealed (paras 14(xv), 28-30, 101-102).
Findings and Observations of the Court. Clause 3 of the Scheme places issuance of notice under Section 148 in faceless mode, and the Revenue admitted that JAOs identified the cases (paras 75-76). Transfers to NFAC without Section 127 orders showed the Revenue “blowing hot and cold” (paras 79-81); Notification No. 61 of 2022, giving JAOs concurrent powers, contravened Sections 130 and 151A (paras 82, 85); and the Gujarat High Court’s contrary view in Snehdham Trust was not followed (para 83). Section 147A left the Scheme unamended, cured no defect found by the Courts and overreached judicial decisions, contrary to Prithvi Cotton Mills (paras 92-97). The Revenue’s statistics and public-interest plea were rejected (paras 98-99). The 1961 Act stood repealed at midnight on 31.03.2026, while the Finance Act, 2026 came into force on 01.04.2026, so assent on 30.03.2026 did not help (paras 101-106).
Verdict and Basis of the Judgment. Section 147A was struck down as unconstitutional; all proceedings under Sections 148A and 148 initiated by JAOs were held to be without jurisdiction and set aside. The writ petitions were allowed, with no order as to costs (para 107).
Analysis of the Judgment. The Court rests its decision on two independent footings: the statutory Scheme (Sections 130 and 151A) mandates faceless initiation, and Parliament cannot nullify judicial decisions without removing their basis. It notes that the Punjab and Haryana High Court reached a similar conclusion, though that judgment is stayed by the Supreme Court (para 100). The view conflicts with the Gujarat and Bombay High Courts’ approach, so further appellate scrutiny is likely.
Legal Takeaway. Within the Andhra Pradesh High Court’s jurisdiction, notices under Sections 148A/148 issued by JAOs are open to challenge as lacking jurisdiction. Practitioners should examine whether such notices followed the faceless route, while watching the Supreme Court proceedings, since the position across High Courts is not uniform.
3. Tabular Summary
| Sl. No. | Case Title | Case No. / Citation | Court / Bench | Date of Order | Facts & Issue | Verdict & Basis of Judgment | Key Legal Takeaway |
|---|---|---|---|---|---|---|---|
| 1 | Bala Sreenivas Rao Somisetty v. ITO, Ward 1, Eluru & Ors. | WP No. 28520 of 2023 and batch | High Court of Andhra Pradesh, Amaravati (Justices N. Jayasurya and T.C.D. Sekhar) | 12.10.2026 | Challenge to Section 147A (inserted retrospectively from 01.04.2021 by Finance Act, 2026) and to JAO-issued notices under Sections 148A/148 despite the faceless Scheme under Section 151A; matters remitted by the Supreme Court on 10.04.2026 (paras 2-13). | Section 147A struck down as unconstitutional: the Scheme remained unamended, no defect was cured, the amendment overreached judicial decisions, and it was inserted into an Act repealed on 31.03.2026. JAO proceedings under Sections 148A/148 set aside as without jurisdiction (paras 75-107). | Notices under Sections 148A/148 must follow the faceless Scheme; Parliament cannot override court rulings without removing their basis; Section 147A not sustainable in this ruling. |
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