Revenue Bar Association (RBA) has launched legal action against Finance Act,2026, arguing some retroactive amendments to Income Tax Act of 1961 are unconstitutional. Filed in Madras High Court,the writ targets specific Finance Act sections the association says breach constitutional principles and court precedents.
Sections 4,8,9,12,13,32,and 33 are main focus. RBA claims they violate separation of powers, basic structure of Constitution as Supreme Court outlined. Petition set for admission before Division Bench,led by Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan,on Monday,June 15,2026.
Section 4 brings sub-section 3AA to Section 92CA of Income Tax Act, laying out Transfer Pricing Officer's calculation for arm’s length pricing in international deals . Effective from June 1,2007. Section 8 adds sub-sections 4A,4B,13A,13B to Section 144C,setting timelines for Assessing Officers' orders, retroactive from 2009 .
Section 9 inserts Section 147A,effective from April 1,2021. Sections 12 and 13 bring in Sections 153(10) and 153B(1A) with retrospective angles. Sections 32,33 add Sections 292BA,292BC,effective from October 1,2019,and April 1,2021.
Section 292BA says assessments aren't invalid if Document Identification Number errors occur,as long as order references it right. Section 292BC declares income-tax authority approvals as administrative,regardless of document flaws or e-signature issues.
RBA argues these breach Articles 14,19(1)(g),245,and 246 of Constitution. Article 14 ensures equal legal protection. Article 19(1)(g) supports right to any profession or trade. Articles 245,246 define Parliament,state legislative powers. Also,some provisions allegedly defy Entry 82 of List I in Schedule VII,limiting Parliament from taxing agricultural income .
Challenge shows broader worries about retroactive taxation's fit with constitutional safeguards. Petition's outcome could shake up tax law and governance in India…
