Orissa High Court issues notice on a petition challenging the constitutional validity of Section 147A of the Income Tax Act, with reassessment proceedings stayed per Supreme Court order.
Orissa HC on S. 147A Validity Challenge
The Orissa High Court has issued notice to the Central Board of Direct Taxes (CBDT) in a writ petition challenging the constitutional validity of Section 147A of the Income Tax Act, 1961, which governs the re-opening of assessments based on information from specified sources.
The Bench also directed that further reassessment proceedings under Section 147A remain stayed, in line with a previous direction by the Supreme Court in a related matter. The petitioner argued that the provision violates Article 14 by creating an arbitrary mechanism for reassessment without threshold safeguards.
"The power to reopen assessments based on non-specific data sources raises serious due process concerns."
The outcome may significantly impact how tax authorities use data analytics and third-party information for reopening cases. Practitioners should monitor this case closely, especially if representing clients facing reassessments under Section 147A.
Citations
- Section 147A, Income Tax Act, 1961
- Article 14, Constitution of India
