The Orissa High Court has issued notice to CBDT on a petition challenging the constitutional validity of Section 147A of the Income Tax Act, with a stay on reassessment proceedings.
Orissa HC on S. 147A Constitutional Validity
The Orissa High Court has issued notice to the Central Board of Direct Taxes (CBDT) on a writ petition challenging the constitutional validity of Section 147A of the Income Tax Act, 1961, which allows for initiation of reassessment proceedings based on information in the tax department's possession. The court has stayed further proceedings under the provision pending adjudication.
Section 147A, introduced to curb tax evasion, enables reopening of assessments without requiring a 'reason to believe' if certain conditions are met. However, the petitioner argued that the provision violates Article 14 (right to equality) by enabling arbitrary re-openings without safeguards. The stay follows a similar interim order by the Supreme Court in related matters, indicating judicial caution.
This development is critical for taxpayers facing reassessment under Section 147A. Practitioners should consider filing interim applications for stay where the provision is invoked, especially in light of emerging doubts about its constitutionality.
Citations
- W.P.(C) No. XXX of 2026, [Petitioner] v. CBDT, Order dated 24 October 2026
