Karnataka High Court Remits JAO Reassessment Writ to Single Judge in Light of Supreme Court’s Section 147A Decision

Background and Context

The Karnataka High Court, in ITO Vs Lubna Shah, has revisited a reassessment dispute arising from notices issued by the Jurisdictional Assessing Officer (JAO). The Division Bench has set aside the earlier order of the learned Single Judge, which had quashed reassessment notices, and has sent the matter back for fresh consideration.

This remand has been done specifically to align with the subsequent judgment of the Hon’ble Supreme Court concerning the insertion of Section 147A into the Income Tax Act 1961 with retrospective effect from 01.04.2021, and to allow the assessee to challenge that amendment.

The core controversy relates to:

  • Whether JAOs were competent to issue reassessment notices under Sections 148 and 148A, and
  • The impact of the newly inserted Section 147A (with retrospective operation) clarifying the meaning of “Assessing Officer” for these provisions.

The Single Judge had earlier allowed the writ petition filed by the assessee primarily on the ground that the JAO lacked jurisdiction. However, after Parliament inserted Section 147A with retrospective effect, and the Supreme Court interpreted the legal position in a batch of appeals, the foundation of that reasoning has been substantially altered.

Impugned Order of the Single Judge

The Revenue had filed a writ appeal before the Division Bench challenging the order dated 24.09.2025 passed by the learned Single Judge in W.P. No. 19345/2024, whereby:

  • The reassessment notices dated 30.03.2024 and 16.04.2024 were quashed, and
  • The proceedings initiated by the JAO were set aside on the premise that the JAO was not the proper authority to invoke reassessment jurisdiction.

After the Supreme Court’s intervention in a similar set of matters, the Karnataka High Court was required to realign its approach in this appeal.

Supreme Court’s Intervention: Section 147A and Jurisdiction of Assessing Officers

Both sides before the Karnataka High Court drew attention to the decision of the Hon’ble Supreme Court in Civil Appeal No.4716/2026 dated 10.04.2026, reported in [2026] 185 Taxmann.com 1007 (SC). In that batch of matters, the Supreme Court examined the effect of the newly inserted Section 147A and related amendments.

The Supreme Court recorded that Parliament has inserted Section 147A into the Income Tax Act, with retrospective effect from 01.04.2021, which reads as follows:

“Insertion of new section 147A.
9. After section 147 of the Income-tax Act, the following section shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2021, namely:–
“147A. Notwithstanding anything contained in any judgement, order or decree of any court or in section 151A or in any scheme framed thereunder, for the removal of doubts, it is hereby clarified that the Assessing Officer for the purposes of sections 148 and 148A shall mean and shall always be deemed to have meant to be an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit referred to in sub-section (3) of section 1448.”

The Supreme Court also noted a connected amendment to Section 279 of the Income Tax Act, 2025, designed to maintain consistency with Section 147A, which clarified that for purposes of Sections 280 and 281, the term “Assessing Officer” would similarly exclude the National Faceless Assessment Centre (NFAC) and the assessment units under Section 273(3).

The amended Section 279 reads:

“71. In section 279 of the Income-tax Act, after sub-section (2), the following sub-section shall be inserted, namely: —
‘(3) The “Assessing Officer” for the purposes of sections 280 and 281 shall mean to be an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit referred to in section 273(3).’”

Revenue’s Stand Before the Supreme Court

The Revenue argued before the Supreme Court that: