THE DEPUTY COMMISSIONER OF INCOME TAX vs. M/S. DIVYASREE INFRASTRUCTURE PROJECTS PVT. LTD.,

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CENTRAL-3(2), 3RD FLOOR, C.R. BUILDING, QUEEN'S ROAD

THE ADDL. COMMISSIONER OF INCOME TAX CENTRAL RANGE-3, 3RD FLOOR, C.R. BUILDING, QUEEN'S ROAD,

THE PR. COMMISSIONER OF INCOME TAX, CENTRAL, BENGALURU, 3RD FLOOR, C.R. BUILDING, QUEEN'S ROAD, …APPELLANTS (BY SRI. RAVI RAJ Y. V., ADV.)

Learned counsel appearing for the parties bring to the notice of this Court the order passed by the Hon'ble Apex Court in Civil Appeal No.4716/2026 dated 10.04.2026 reported in [2026] 185 Taxmann.com 1007 (SC), whereunder the Hon'ble Apex Court in identical fact situation, taking note of the amendment by way of insertion of Section 147A into the Income Tax Act, passed the following order: “15. It is stated by the Learned Assistant Solicitor General that by inserting Section 147A into the IT Act, the term ‘Assessing Officer’ has been expressly clarified to mean an officer other than the faceless units and the same is deemed to have come into effect retrospectively from 01.04.2021. The said provision reads as follows: Insertion of new section 147A.

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

It is also asserted that the amendment to Section 279 of the Income Tax Act, 2025 is to bring it in consonance with the newly inserted Section 147A of the IT Act, thereby implying that the “Assessing Officer” for the purposes of Sections 280 and 281 of the Income Tax Act, 2025 shall mean to be an Assessing Officer other than the NFAC or any assessment unit referred to in Section 273(3). The amended Section 279 reads as follows: 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).’

In this backdrop, where an interpretative issue concerning the older provisions is already under consideration, it is contended on behalf of Appellant-Revenue that Parliament, from the outset, intended that while notices could be issued by either the JAO or the Faceless Assessing Officer (FAO), the subsequent quasi-judicial adjudication of such notices was to be undertaken by the FAOs.

It is urged that, in light of the divergent views taken by the High Courts owing to perceived ambiguity in the existing law, Parliament has now made clarificatory amendment with retrospective effect from 01.04.2021, the date on which the original provisions came into force, and that the alleged anomalous situation, if any, has been removed. It was additionally submitted that the power to enact retrospective amendments is well settled in law, and that fresh notices will now be issued to assessees in accordance with the clarified position, so that pending reassessment proceedings may be concluded in accordance with law.

Conversely, it has been vehemently urged on behalf of the assessees that the new Amendment is not ‘clarificatory’ in nature but is rather an abortive attempt to fasten penal liability retrospectively, which is impermissible under law. It is their contention that the amending laws having antedated civil consequences ought to be construed strictly.

In all fairness, we may add that several other contentions have also been raised by both sides, which we do not consider it necessary to advert to at this stage in light of the order we

It appears to us that the assessees would be entitled to challenge the amending provisions as elaborated upon heretofore, for which it would only be appropriate to relegate them to the jurisdictional High Courts. All contentions raised before us, as well as any other grounds available to them to question the impugned notices, may be urged before the High Courts instead. 22. Since the High Courts have primarily quashed the reassessment notices on the ground that the JAOs lacked competence to initiate such proceedings, and the very foundation of that view now stands altered by the amending legislation, the impugned judgments in favor of the assessees are set aside on this limited ground. The matters are accordingly remitted to the respective High Courts for fresh consideration. Ordered accordingly.

The assessees are granted liberty to amend their writ petitions, if so advised, within a period of four (4) weeks from the date of uploading

Similarly, the Appellant-Revenue shall be at liberty to file their written submissions and affidavits before the jurisdictional High Courts within a period of three (3) weeks thereafter.

No additional time shall be granted to the parties beyond what has been granted above.

We make it clear that we have not expressed any opinion on the merits of the controversy, including the validity, scope, effect, retrospectivity or applicability of the amended provisions, and all such questions are left open to be decided by the High Courts.

Finally, during the pendency of the writ petitions before the High Courts, there shall be an interim stay of further assessment/reassessment proceedings pursuant to the impugned notices, subject to such terms and conditions as may be imposed by the High Courts.

The High Courts are requested to decide the matters preferably by 30.09.2026. Learned

Learned counsel appearing for the parties seek disposal of the above writ appeal in terms of the order passed by the Hon'ble Apex Court, referred to above. Further, learned counsel appearing for respondent/assessee seeks liberty to lay challenge to Section 147A of the Act in terms of the liberty granted by the Hon'ble Apex Court.

Learned counsel for the parties also brings to the notice of this Court, order dated 04.05.2026 in SLP(C).No.8682/2024 passed by the Hon'ble Apex Court taking note of the order dated 10.04.2026 in Civil Appeal.No.4716/2026, which reads as follows: “7. Consequently, keeping in mind the reasons set out in order dated 10.04.2026, the impugned judgment in each appeal is set aside and the instant appeals are disposed of by remitting the matters to the jurisdictional High Courts for

Taking note of the submissions of the learned counsel appearing for the parties as well as taking note of the above referred orders of the Hon'ble Apex Court, we do not deem it fit to go into the merits of the case. We deem it appropriate to set aside the order passed by the learned Single Judge and remit the matter to the learned Single Judge with liberty to the respondent/assessee to lay challenge to Section 147A of the Act, keeping open all the contentions of the parties, including the observations made by the Hon'ble Apex Court in order dated 04.05.2026 in SLP(C).No.8456/2025 and Connected Appeals.

Hence, the following: ORDER