The Andhra Pradesh High Court Just Told Parliament It Cannot Legislate Away Judicial Authority — And It Is Right

The Hook — A Constitutional Line in the Sand

There are moments in Indian constitutional jurisprudence when a High Court does more than resolve a tax dispute — it draws a line that Parliament crosses at its own peril. The Andhra Pradesh High Court's decision in Bala Sreenivas Rao Somisetty vs The Income Tax Officer (WP No. 28520 of 2023, decided on 12.10.2026) is precisely such a moment. In striking down Section 147A of the Income Tax Act, 1961 — a provision Parliament inserted retrospectively through the Finance Act, 2026 to neutralise adverse judicial rulings — the Division Bench of Justices Ninala Jayasurya and T.C.D. Sekhar has delivered one of the most significant constitutional law judgments in recent memory.

This is not merely about whether a tax officer in Eluru had jurisdiction to issue a reassessment notice. This is about whether Parliament can, under the thin veneer of a "clarificatory amendment," simply legislate away judgments it does not like. The Court's answer — a resounding no — deserves close attention from every practitioner who has watched successive governments weaponise retrospective amendments to escape judicial accountability.

The Facts — A Familiar Pattern of Legislative Overreach

The factual backdrop is straightforward but the constitutional stakes are enormous. Following the introduction of the e-Assessment of Income Escaping Assessment Scheme, 2022 (notified under Section 151A of the Income Tax Act, 1961), reassessment proceedings under Sections 147, 148, and 148A were required to be conducted in a faceless manner. The scheme expressly included Section 148 within its ambit.

Despite this, Jurisdictional Assessing Officers (JAOs) across the country continued issuing notices under Section 148 — bypassing the faceless mechanism entirely. Multiple High Courts, including the Andhra Pradesh High Court itself by its order dated 28.10.2025, held that the JAOs lacked jurisdiction once the faceless scheme came into force.

The Revenue's response was not to comply with these rulings or to amend the underlying scheme. Instead, Parliament enacted Section 147A through the Finance Act, 2026, declaring — with retrospective effect from 01.04.2021 — that the "Assessing Officer" for purposes of Sections 148 and 148A had always meant an officer other than the National Faceless Assessment Centre (NFAC). The provision carried a non-obstante clause overriding any judgment, order, or decree of any court, as well as Section 151A itself and any scheme framed thereunder.

When the matter reached the Supreme Court, the Apex Court set aside the High Court judgments on the limited ground that the legislative foundation had changed, and remitted the matters back to the High Courts for fresh consideration, granting liberty to challenge the constitutional validity of Section 147A.

The Arguments — A Fundamental Clash of Constitutional Vision

The petitioners mounted a multi-pronged attack on Section 147A. Their core contention was that the provision was not genuinely clarificatory but was a transparent attempt to nullify judicial decisions without removing their basis — the scheme under Section 151A remained unamended, and Section 148 continued to be part of that scheme. They argued that the amendment violated the doctrine of separation of powers, the rule of law, and Articles 14, 19(1)(g), and 265 of the Constitution.

Critically, the petitioners also raised a technical but potentially devastating argument: the Income Tax Act, 1961 had been repealed and replaced by the Income Tax Act, 2025 with effect from 01.04.2026. The Finance Act, 2026 — which itself came into force on 01.04.2026 — was therefore purporting to amend a statute that no longer existed.

The Revenue, represented by the Additional Solicitor General, relied on the well-established principle that Parliament possesses plenary power to enact validating legislation with retrospective effect. It invoked the twin test for validating acts: (1) removal of the defect identified by the court, and (2) such removal through retrospective legislation. The Revenue argued that Section 147A satisfied both limbs — it clarified legislative intent and cured the jurisdictional defect that had led to the quashing of notices. It also pressed the pragmatic argument that over 8.82 lakh reassessment notices had been issued, involving assessed income exceeding Rs. 21.74 lakh crores, and that striking down the provision would have catastrophic consequences for public revenue.

The Judgment — A Masterclass in Constitutional Reasoning

The Court's reasoning proceeds on two independent but mutually reinforcing tracks, and both are devastating for the Revenue.

First, on the merits of the validating legislation argument: The Court accepted that Parliament has the power to enact validating legislation retrospectively. But it correctly identified the critical limitation — the legislature must remove the basis of the judicial decision it seeks to overcome. Citing Shri Prithvi Cotton Mills Ltd. vs Boroach Borough Municipality (1969) 2 SCC 283 and State of Tamil Nadu vs M. Rayappaiah Gounder (1971) 3 SCC 1, the Court held that Section 147A failed this test because the scheme under Section 151A — which was the very basis on which the High Courts had quashed the JAO notices — remained unamended. Section 148 was still part of the faceless scheme. You cannot override a judgment by enacting a provision that contradicts your own unamended subordinate legislation.

"Without amending the said scheme, any clarification or validation through amendment cannot be permitted especially when the basis is not removed. Therefore, by introducing Section 147A of the Act, the Legislature is trying to over reach the judgments rendered by various High Courts in this regard, in direct conflict with Doctrine of separation of powers, which is the basic structure of the Constitution."

Second, on the repeal argument: The Court held that the Income Tax Act, 1961 stood repealed at midnight on 31.03.2026, when the Income Tax Act, 2025 came into force. Since the Finance Act, 2026 itself stipulated that it would come into force on 01.04.2026 (not 30.03.2026, the date of Presidential assent), the amendment was being made to a repealed statute. Relying on Section 5 of the General Clauses Act and the Supreme Court's decision in Common Cause vs Union of India (2003) 8 SCC 250, the Court held that when an enactment expressly provides its own commencement date, the date of Presidential assent is irrelevant. An amendment to a repealed Act is a legal nullity.

On both grounds, the Court struck down Section 147A as unconstitutional and set aside all impugned proceedings initiated by JAOs under Sections 148A and 148.

The Critique — Where the Judgment Shines and Where It Could Have Gone Further

Let me be direct: this is an excellent judgment. It is well-reasoned, constitutionally sound, and courageous. The Court has done what too many High Courts shy away from — it has told Parliament that the separation of powers is not a polite suggestion but a structural constraint on legislative authority.

The strongest part of the judgment is its treatment of the validating legislation doctrine. The Court has correctly identified that Parliament cannot have it both ways — it cannot maintain a statutory scheme that mandates faceless reassessment proceedings and simultaneously enact a provision that says those same proceedings can be conducted by jurisdictional officers. The contradiction is not merely technical; it goes to the heart of legislative competence. If the scheme under Section 151A is the basis of the judicial decisions Parliament seeks to overcome, then the scheme itself must be amended or withdrawn. You cannot build a house on a foundation you refuse to alter and then claim the house is new.

The repeal argument, while technically sound, is where I have some reservations — not about its correctness, but about its robustness on appeal. The Revenue will argue, with some force, that Section 536(2)(c) of the Income Tax Act, 2025 expressly preserves the operation of the repealed Act for pending proceedings and proceedings initiated in respect of pre-2026 tax years. If the repealed Act continues to govern these proceedings, does it not follow that Parliament can amend the repealed Act for those limited purposes? The Court addresses this at paragraphs 103-106 but does not fully grapple with the strongest version of this argument. I expect this to be the Revenue's primary battleground in the inevitable SLP.

One aspect the Court could have developed further is the Article 14 challenge. The petitioners argued that the retrospective amendment was arbitrary and violative of the right to equality. The Court touches on this but does not engage deeply with the arbitrariness doctrine post-Shayara Bano vs Union of India (2017) 9 SCC 1. A more robust Article 14 analysis would have strengthened the judgment against appellate scrutiny.

The Court also declined to be swayed by the Revenue's "floodgates" argument — the contention that striking down Section 147A would jeopardise Rs. 21.74 lakh crores in assessed income. This is exactly right. Constitutional validity cannot be held hostage to fiscal convenience. If the Revenue chose to issue notices through JAOs in defiance of its own faceless scheme, it cannot now plead administrative chaos as a defence. As the Court aptly noted at paragraph 99:

"Merely because there was no challenge to the proceedings initiated under Section 148 by most of the assessees, that by itself, will not give any right to the Revenue to undertake assessment in non-faceless manner, contrary to the statutory provisions."

The Takeaway — What This Means for Practitioners

For tax practitioners: If your client received a Section 148 notice from a JAO (not through the NFAC), this judgment provides a powerful basis for challenge — at least within the Andhra Pradesh High Court's jurisdiction, and as persuasive authority elsewhere. The key argument is not merely jurisdictional; it is constitutional. Frame your challenge in terms of the separation of powers and the failure to remove the basis of prior judicial rulings.

For constitutional law practitioners: This judgment is a significant addition to the validating legislation jurisprudence. It reinforces the principle that retrospective amendments must genuinely cure the defect — not merely assert a contrary position while leaving the underlying legal framework intact. The judgment will be cited extensively in challenges to other retrospective amendments, particularly in the tax and regulatory spheres.

For everyone: Watch for the SLP. The Supreme Court has already stayed the Punjab and Haryana High Court's similar ruling (dated 10.09.2026), and it is virtually certain to stay this one as well. The ultimate question — whether Parliament can validate JAO jurisdiction without amending the faceless scheme — is headed for a Constitution Bench. The stakes could not be higher. If the Supreme Court upholds this judgment, it will reaffirm that judicial review is a meaningful check on legislative power. If it reverses, it will signal that the validating legislation doctrine has become a rubber stamp for legislative override of judicial authority.

The Andhra Pradesh High Court has done its part. The Constitution, for now, is in good hands. Whether it remains so depends on what happens next in New Delhi.