📷 Image: Wikimedia Commons / Harvinder Chandigarh
Politics
Punjab & Haryana HC Declares Income Tax Section 147A Unconstitutional
✍️ Live Law
🗓 10 Sep 2026, 02:38 PM
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The Punjab & Haryana High Court has ruled Section 147A of the Income Tax Act unconstitutional, striking down the provision that allowed the government to demand a percentage of a taxpayer’s income without a formal assessment.
The Punjab and Haryana High Court on Tuesday declared Section 147A of the Income Tax Act unconstitutional, invalidating the provision that allowed the central government to demand a percentage of a taxpayer’s income without a formal assessment.
The court held that the clause violated the constitutional right to equality and the principle of due process, as it enabled the government to levy tax on a taxpayer’s income without a proper audit or court order.
Section 147A had been used to collect advance tax on the basis of estimated income, often leading to disputes over the accuracy of the calculations. The ruling is expected to prompt a review of the provision and may affect pending cases involving advance tax assessments.
The decision comes amid growing concerns over the fairness of tax collection mechanisms and could lead to changes in how the government imposes tax on unverified income. The court directed the government to withdraw any pending orders under Section 147A.
The court held that the clause violated the constitutional right to equality and the principle of due process, as it enabled the government to levy tax on a taxpayer’s income without a proper audit or court order.
Section 147A had been used to collect advance tax on the basis of estimated income, often leading to disputes over the accuracy of the calculations. The ruling is expected to prompt a review of the provision and may affect pending cases involving advance tax assessments.
The decision comes amid growing concerns over the fairness of tax collection mechanisms and could lead to changes in how the government imposes tax on unverified income. The court directed the government to withdraw any pending orders under Section 147A.