M/s. SREE GOPAL AGENCIES vs. NATIONAL FACELESS ASSESSMENT CENTRE

WP/1196/2026HC Andhra PradeshAPHC01068928202511 October 2026Author: NINALA JAYASURYA,T.C.D.SEKHAR156 pages
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What did the High Court hold?

The High Court held that Section 147A of the Income Tax Act, 1961, introduced by the Finance Act, 2026, is unconstitutional and struck it down. The Court reasoned that the Finance Act, 2026, received the President's assent on March 30, 2026, but expressly came into force from April 1, 2026. Therefore, any amendment or insertion made to a repealed Act (as implied by the retrospective application) was not sustainable. The Court cited the Supreme Court's judgment in 'Common Cause Vs. Union of India and others' to support the principle that an Act comes into force on the date expressly provided, or if not specified, on the date of assent. Since Section 147A was found unconstitutional, all proceedings initiated by the JAOs under Sections 148A and 148, which were to be undertaken in a faceless manner, were deemed to be without jurisdiction and were set aside. The Court allowed the writ petitions and quashed the impugned proceedings/orders.

What were the facts?

Numerous writ petitions were filed challenging the constitutional validity of Section 147A of the Income Tax Act, 1961, introduced by the Finance Act, 2026, with retrospective effect from April 1, 2021. Petitioners argued that this section was ultra vires, violated the basic structure of the Constitution, including the Rule of Law and separation of powers. They also challenged orders passed by Jurisdictional Assessing Officers (JAOs) under Sections 147, 144, and 144B of the Income Tax Act, 1961, deeming them illegal, arbitrary, void ab initio, and violative of Articles 14, 19(1)(g), and 265 of the Constitution, and contrary to Section 151A of the Act. The petitions concerned various tax periods and involved multiple petitioners and respondents from the Income Tax Department.

What were the issues?

1. Whether Section 147A of the Income Tax Act, 1961, introduced by the Finance Act, 2026, with retrospective effect from April 1, 2021, is unconstitutional and violative of the basic structure of the Constitution, including the Rule of Law and separation of powers, as contended by the petitioners? 2. Whether the orders passed by the Jurisdictional Assessing Officers (JAOs) under Sections 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961, are illegal, arbitrary, void ab initio, and violative of Articles 14, 19(1)(g), and 265 of the Constitution, and contrary to Section 151A of the Income Tax Act, 1961, as argued by the petitioners? Petitioner's arguments: The petitioners contended that Section 147A, by giving retrospective effect to a provision introduced by the Finance Act, 2026, was unconstitutional and violated fundamental constitutional principles. They also argued that the assessment orders passed under the challenged sections were illegal and arbitrary, infringing upon their constitutional rights. They relied on various constitutional provisions and principles. Revenue's arguments: The judgment does not explicitly record the arguments presented by the revenue or the respondents.

Which sections of the Income-tax Act were involved?

Section 147A,Section 147,Section 144,Section 144B,Section 151A,Section 148A,Section 148

AI-generated summary — verify with the full judgment below

NJS,J & TCDS, J WP Nos.28520 of 2023 and batch

1

Date of reserved for orders : 22.09.2026/23.09.2026 Date of pronouncement : 12.10.2026 Date of uploading : 12.10.2026 APHC010549832023

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Juri iction) [3543] MONDAY, THE 12th DAY OF OCTOBER 2026 PRESENT THE HONOURABLE SRI JUSTICE NINALA JAYASURYA THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WP No.28520 OF 2023 AND WP Nos.8527, 9797, 9805, 10579, 14140, 15681, 21111, 21113, 21117, 21128, 21130, 21879, 21881, 21883, 22277, 22341, 23509, 28457 of 2024 AND WP Nos.6096, 6161, 6162, 6317, 9069, 9131, 12560, 12731, 13479, 14655, 14675, 14685, 18278, 18732, 19157 19539, 20185, 22201, 23301, 24339, 24803, 25245, 27991 of 2025 AND WP Nos.141, 216 234, 251, 317, 660, 737, 1023, 1074, 1082, 1089, 1092, 1151, 1196, 1205, 1218, 1424, 1440, 1464, 1482, 1535, 1538, 1574, 1586, 1593, 2013, 2024, 2070, 2083, 2571, 2690, 2691, 2692, 2693, 2694, 2695, 2696, 2697, 2698, 2700, 2901, 3020, 3120, 3122, 3

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