Case law tracker · Reassessment
Section 147A and the JAO–FAO controversy: where it stands
BharatTax.net Research · Last reviewed 26 September 2026Built from the text of the High Court judgment and the ITAT orders linked below. The Supreme Court’s stay of 18 September is taken from press reports of the order. Text prepared with AI assistance.
The question is who may issue a reassessment notice under section 148: the assessee’s own jurisdictional Assessing Officer (JAO), or only a faceless Assessing Officer (FAO) chosen by automated allocation under the scheme framed under section 151A. Thousands of reassessments issued since 2022 turn on the answer. They include every one in which the notice came from the local ward or circle.
Parliament answered it for the Revenue in the Finance Act, 2026 by inserting section 147A, backdated to 1 April 2021. The first High Court to rule on the new section has held it unconstitutional, and that ruling is now stayed.
What section 147A says
“Notwithstanding anything contained in any judgment, 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 144B.”
The Memorandum to the Finance Bill gave two reasons: divergent High Court rulings, and the need for the same intent to appear in the Income-tax Act, 2025, which came into force on 1 April 2026. A corresponding amendment was made to that Act with effect from the same date.
How it got here
29 Mar 2022
The e-Assessment of Income Escaping Assessment Scheme, 2022 is framed under section 151A. It covers the issue of notices under section 148 and requires them to be issued through automated allocation and in a faceless manner.
2023 to 2025
High Courts divide. Telangana (Kankanala Ravindra Reddy), Bombay (Hexaware Technologies, Kairos Properties), Gauhati (Ram Narayan Sah), Punjab & Haryana (Jatinder Singh Bhangu), Rajasthan, Madras, Karnataka and Andhra Pradesh hold that only a faceless officer could issue the notice. Delhi (T.K.S. Builders), Gujarat (Snehdham Trust) and Calcutta (Triton Overseas) hold for the Revenue.
Finance Act, 2026
Section 147A is inserted with retrospective effect from 1 April 2021, while the Revenue’s appeals are pending in the Supreme Court. Section 151A and the 2022 scheme are left unamended.
10 Apr 2026
The Supreme Court, in ITO v. Tej Partap Singh (Civil Appeal No. 4716 of 2026, as cited by the Tribunal), sets aside the High Court judgments in the assessees’ favour on that limited ground and remits them for fresh decision in the light of section 147A, expressing no view on its validity. It grants an interim stay of reassessment proceedings on the impugned notices and asks the High Courts to decide, preferably by 30 September 2026.
10 Sep 2026
The Punjab & Haryana High Court, in Jyoti Sareen v. Union of India, declares section 147A unconstitutional and quashes the notices on a second, independent ground: they were not issued through randomised automated allocation.
18 Sep 2026
The Supreme Court stays the High Court judgment on the Union’s petition, on the condition that the assessment proceedings do not go further until the matter is finally decided. Final hearing listed for 3 December 2026 (as reported).
Why the High Court struck it down
Jyoti Sareen v. Union of India, CWP No. 15791 of 2024 and connected petitions, Punjab & Haryana High Court, Deepak Sibal and Rupinderjit Chahal JJ., pronounced 10 September 2026. The reasoning, in the court’s own sequence:
- The basis of the earlier judgments was never removed. Those rulings rested on section 151A and the scheme of 29 March 2022, and both remain on the statute book unamended. A validating law must cure the defect a court found. A “clarification” that leaves the defect in place, the court held, only substitutes the legislature’s opinion for the courts’ findings.
- The two provisions conflict within one statute. Section 147A and section 151A with its scheme now exist side by side and point in opposite directions. A non-obstante clause alone does not make that a valid validation law.
- The stated purpose was not achieved. The amendment was meant to bring certainty and end litigation. Instead, the court recorded, thousands of petitions are pending in at least eight High Courts.
- The notices failed independently. Even apart from section 147A, the notices were set aside because they were not issued through randomised automated allocation, as the 2022 scheme requires. The court agreed with Bombay, Telangana, Rajasthan, Madras, Karnataka, Andhra Pradesh and Gauhati, and respectfully differed from Delhi, Gujarat and Calcutta.
What the Tribunal has done since section 147A
In seventeen ITAT orders on this database, the Tribunal itself deals with section 147A. We read each of them in full. They fall into three groups, and the split matters more than any single order. All of them were passed before the High Court’s ruling of 10 September or within a day of it, and none cites it. Orders that mention the section only in the grounds of appeal, without the Tribunal addressing it, are not counted.
Section 147A applied: the JAO ground rejected (4)
| Order | What the Tribunal did |
|---|---|
| Jayesh Jain v. DCITITAT Ahmedabad · 9 Sep 2026 | Notice issued after 1 April 2021, so section 147A is attracted; the JAO ground is dismissed. |
| Satpal Nandrajog v. DCITITAT Delhi · 13 Aug 2026 | Reads section 144B, the CBDT orders of September 2021, T.K.S. Builders and section 147A together; the jurisdiction ground is dismissed. |
| ITO v. Nageswara RaoITAT Hyderabad · 15 Jul 2026 | The CIT(A) quashed the reassessment when section 147A did not exist. The Tribunal holds the JAO's action validated and sends the merits back. |
| Agarapasala Reddy Prasanna v. ACITITAT Bangalore · 15 Jun 2026 | The faceless-officer argument “does not hold any water anymore” after section 147A. |
Sent back to await the High Courts (10)
| Order | What the Tribunal did |
|---|---|
| Al Quresh Exports v. ACIT (five appeals)ITAT Mumbai · 11 Sep 2026 | The question has “not yet attained finality”. Restored to the AO to decide by the final binding ruling of the High Court or Supreme Court. |
| ITO v. Bee Cee Fireworks IndustriesITAT Chennai · 28 Jul 2026 | Remitted to the CIT(A), following the Supreme Court's April remand and the pending Madras High Court matters. |
| ITO v. C. Ammapatty Primary Agricultural Co-operative Credit SocietyITAT Chennai · 8 Jul 2026 | Same course: remitted to the CIT(A) for fresh consideration. |
| Lakshmanan Krishnakumar v. ITOITAT Chennai · 6 Jul 2026 | Same course, on the assessee's appeal. |
| ITO v. AnjuITAT Delhi · 29 Jun 2026 | The CIT(A) had allowed the appeal only on the JAO ground. Noting section 147A and the Supreme Court remand, every ground is restored to the CIT(A). |
| Esaar India Ltd. v. ITOITAT Kolkata · 5 Aug 2026 | Section 147A set out; limitation and the merits sent back to the CIT(A). |
| DCIT v. Dinesh Kumar KhatoriaITAT Jaipur · 12 Aug 2026 | Proceedings on disputed JAO notices remain stayed while the High Court reconsiders. Remanded to the CIT(A) to decide the merits in the light of that outcome. |
| ITO v. Yuvraj SinghITAT Jaipur · 30 Jul 2026 | The CIT(A) followed a Rajasthan High Court ruling that the Supreme Court has since set aside. Restored to be decided after the High Court's fresh decision. |
| DCIT v. Ashok Kumar PasariITAT Jaipur · 16 Jul 2026 | Same reasoning and the same direction as Yuvraj Singh. |
| Yerramaneni Aparna v. ITO (three appeals)ITAT Visakhapatnam · 17 Jul 2026 | Sets out what the Supreme Court left to the High Courts, including the validity and retrospectivity of section 147A. The quantum and penalty appeals are set aside to the CIT(A). |
Decided on another ground, question left open (3)
| Order | What the Tribunal did |
|---|---|
| ITO v. Fiero FernandesITAT Mumbai · 8 Sep 2026 | Both additions deleted on merits, so the effect of section 147A is “rendered academic” and left open. Revenue's appeal dismissed. |
| Aegis Automation India Pvt. Ltd. v. ACITITAT Hyderabad · 29 Jul 2026 | The ₹25 lakh purchase addition is deleted; the jurisdiction grounds, including the challenge to section 147A, are left open. |
| Bhanudas Sahebarav Bhosale v. ITOITAT Pune · 23 Jul 2026 | The Revenue relied on section 147A. The Tribunal quashed the notice on a different ground, the time limit for AY 2015-16, and did not reach the JAO question. |
The pattern follows the bench more than the facts. Chennai and Jaipur have consistently sent the matter back to await their High Courts’ fresh decisions. Ahmedabad and Bangalore have applied the section as it stands. Delhi, Hyderabad and Mumbai have each gone more than one way. Mumbai, for example, restored the point in Al Quresh Exports and, in Fiero Fernandes, decided the additions and avoided it altogether.
The volume behind this is large. Since 2023, 909 ITAT orders on this database discuss section 151A together with section 148 and the faceless or jurisdictional officer. Most were decided before section 147A existed, many of them quashing reassessments that section 147A would now validate.
Short answers
What does section 147A of the Income-tax Act say?
Inserted by the Finance Act, 2026 with retrospective effect from 1 April 2021, it declares that the Assessing Officer for sections 148 and 148A means, and always meant, an officer other than the National Faceless Assessment Centre or its assessment units. In effect it says the jurisdictional AO could issue reassessment notices, notwithstanding section 151A, the 2022 scheme or any court judgment.
Has section 147A been struck down?
The Punjab and Haryana High Court declared it unconstitutional in Jyoti Sareen v. Union of India on 10 September 2026. The Supreme Court stayed that judgment on 18 September 2026, on the condition that the assessment proceedings do not proceed until the matter is finally decided. The section is not struck down in law while the stay operates.
How is the ITAT treating the JAO ground after section 147A?
Of the seventeen ITAT orders on this database in which the Tribunal itself addresses section 147A, four apply it and reject the ground, ten send the matter back to await the High Courts, and three decide the appeal on another ground and leave it open. None cites the Jyoti Sareen ruling of 10 September 2026 yet.
Sources and method
The High Court’s reasoning is taken from the text of the judgment in Jyoti Sareen (CWP No. 15791 of 2024), including its account of the Supreme Court’s remand of 10 April 2026. The Supreme Court’s stay of 18 September 2026 is taken from press reports of the order; we have not seen the order itself. The ITAT orders were found by full-text search of this database and read in full before being grouped. The Tribunal has published orders dated after 23 September 2026 that this database does not yet hold. This page is a summary of the case law, not advice on any particular notice.