The Supreme Court of India was informed by the Government of India about proposed amendments to Section 150, effective April 1, 2026. Representing the Union of India, the ASG said changes would affect pending assessment and reassessment cases nationwide.
NEW DELHI: The Government of India informed the Hon’ble Supreme Court that it is in the process of implementing further amendments to Section 150 of the Income Tax Act, with the proposed changes set to take effect on April 1, 2026.
During the hearing, the learned Additional Solicitor General (ASG), representing the Union of India, noted that the upcoming amendment would significantly impact numerous pending assessment and reassessment proceedings nationwide.
According to submissions made to the Court, following the judgment in the Ashish Aggarwal case, nearly 2,000 cases are awaiting resolution in the Hon’ble Supreme Court, while approximately 18,000 cases are pending in various High Courts.
The Income Tax Department has reported that reassessment proceedings involving more than Rs 16.5 lakh crore are currently on hold. The Department emphasized that this significant sum is crucial to the national economy, asserting that assessment and litigation processes cannot remain unresolved indefinitely.
Observations of the Hon’ble Court
The Hon’ble Chief Justice of India indicated that the proposed amendment may be clarificatory in nature and could resolve issues concerning the validity of the faceless reassessment mechanism. He further mentioned that once the amended law comes into effect, its constitutional validity might be contested, and in such cases, the Court may consider granting a three-month moratorium to allow affected parties to pursue appropriate legal remedies.
Hon’ble Justice J.B. Nagarathna expressed that if Parliament enacts an amendment that alters the existing legal framework, the Court will review its impact and determine whether it affects prior judicial decisions.
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The Court clarified that no litigant can be forced to approach either the High Court or the Supreme Court; the choice of forum lies with the concerned party. However, it acknowledged that if matters are initially addressed by the High Courts, the Supreme Court would benefit from their insights.
Submissions by the Government and Petitioners
The ASG stated that upon the amendment’s enactment, all previously issued notices and assessment proceedings would be reinstated, with specific timelines for passing orders. He argued that the repeated filing of petitions has led to extensive delays in the assessment process.
Conversely, the petitioners raised concerns regarding the nearly five years that have passed, questioning the forum and the manner in which issues related to validity, legislative intent, and potential conflicts with the faceless reassessment mechanism would be adjudicated. In response, the Hon’ble Chief Justice noted that the validity of a law can only be evaluated after it comes into force.
The Hon’ble Supreme Court has adjourned the matter until April 6, 2026.
The implications of the proposed amendment, effective from April 1, 2026, on pending cases and the faceless reassessment framework will be monitored closely.