High Court Directs Specific Procedure for Handling Tax Returns

High Court Directs Specific Procedure for Handling Tax Returns of Judges Pending Final Writ Adjudication

Issue

Whether the interim order prohibiting the processing of income tax returns of High Court and Supreme Court Judges under the new tax regime (Section 115BAC) should be modified to allow CPC electronic return processing while protecting Judges’ return status through specific intimation mechanisms.

Facts

Writ Petition: The Delhi Tax Bar Association filed a writ petition challenging provisions relating to individual taxation under the new tax regime (Section 115BAC of the Income-tax Act, 1961 / Section 202 of the Income-tax Act, 2025).
Initial Interim Order: An interim order (paragraph 17) was passed directing the Income-tax Department not to process tax returns filed by High Court and Supreme Court Judges under the new tax regime.
Department’s Modification Application: The Income-tax Department moved an application seeking modification of paragraph 17 of the interim order.
Technical Limitation: The Department submitted that tax returns are processed electronically through CPC software, which cannot automatically identify returns filed specifically by sitting Judges. Halting processing exclusively for Judges would force the Department to stop processing returns for all taxpayers across the country.

Decision

Intimation Procedure Established: Private Secretaries of Hon’ble Judges were directed to email relevant details of filed returns to the CPC by August 18, 2026, upon which the Department must not process those specific returns.
Future/Revised Returns Timeline: For any Judge filing a new or revised return under the new tax regime, their Private Secretary must send the details to the CPC within 12 hours of filing.
Status of Demands and Refunds: If returns of Judges have already been processed and tax demands were raised, such demands shall be kept in abeyance pending final adjudication of the writ petition.
Handling of Refund Amounts: Any refundable amounts determined will not be refunded during the pendency of the petition; if already refunded, they will remain subject to the final writ outcome.
Outcome: Decided partly in favor of the assessee by modifying procedural safeguards while preventing a global halt of automated tax processing.

Key Takeaways

Automated Processing Safeguards: Judicial directions restricting automated CPC tax processing can be modified to use manual intimation lists to prevent systemic disruption to general taxpayers.
Protection Pending Writ Adjudication: Tax demands and refunds arising from contested tax regimes for specific classes of assessees can be stayed or held in abeyance without invalidating overall filing systems.
Time-Bound Compliance: Strict short-window timelines (e.g., 12 hours post-filing) can be mandated for secretarial intimations to synchronize judicial protection with electronic tax administration.

HIGH COURT OF DELHI

Delhi Tax Bar Association

Union of India

Dinesh Mehta and Rajneesh Kumar Gupta, JJ.

W.P.(C) 9365 of 2026

AUGUST 10, 2026

Sachit Jolly, Sr. Adv., Mrs. Mansha Anand, Sohum Dua, Abyudaya Shankar Bajpai, Ghunaim Siddiqui, Ms. Manvi, Ramanand Roy and Ms. Saloni Ray, Advs. for the Petitioner. Shlok Chandra, SSC, Ms. Naincy Jain, Ms. Madhavi Shukla, JSCs, Udit Dad, Adv., Naveen Gupta, PDIT, Aditya R., Sudhendra Kumar, Prabhakar, Addl. DITs, N. Sairaj, Nishant Rao, JDITs and Somsekhar, DDIT for the Respondent.

ORDER

CM APPL. 52591/2026 (for modification of jt. dt.22.07.2026)

1. An application has been moved by the applicant/respondent no. 2-Income-Tax Department, seeking modification of the order dated 22.07.2026, more particularly, para no. 17 thereof.

2. While submitting at the outset, that presently the order in essence does not much concerns the Department, Mr. Shlok Chandra, learned Senior Standing Counsel for the respondent informed that what is creating a procedural problem to the respondents is the direction contained in para no. 17 of the order, which mandates that the returns filed by Hon’ble Judges ‘shall not be processed’.

3. While highlighting that the processing of the Income-Tax Returns is done electronically, through computer generated programming at CPC level and that the software by itself cannot identify which return belongs to a sitting judge of High Court or Hon’ble the Supreme Court, Mr. Shlok Chandra, learned Senior Standing Counsel for the respondent submitted that if strict compliance of para no. 17 of the order is to be made, the processing of the returns filed by all the assessees is required to be stopped.

4. Learned Senior Standing Counsel for the respondents thus prayed that appropriate modification be made in the order to facilitate processing of returns of other assessees.

5. Having heard learned counsel for the applicant-Income-Tax Department, we deem it appropriate to request the Private Secretaries of Hon’ble Judges, who have filed their Income-Tax Returns under the new regime in furtherance of the interim order passed by us on 22.07.2026, to send following details through email to Mr. N. Sairaj [cpc.judicial@incometax.gov.in] [Mob. No:- 8073850090] latest by 18.08.2026:-

(i)

Name of Hon’ble Judge;

(ii)

Assessment Year;

(iii)

Permanent Account Number (PAN);

(iv)

Date of filing Return;

(v)

Acknowledgment Number (of Return).

6. It shall be required of the respondents not to process returns of the judges qua whom such intimation has been received.

7. It is further ordered that in case any Hon’ble Judge now proposes to file a return/revised return under the new regime in furtherance of the interim order dated 22.07.2026, his/her Private Secretary may also send details, as mentioned in para no. 5 above, within 12 hours of the return having been filed.

8. It is informed by Mr. Shlok Chandra that the returns are automatically processed and there is every likelihood that by the end of August, 2026, about 98% of the returns would be processed without human intervention. We, therefore, order that:-

(a)

in case the returns of the Judges covered by the order dated 22.07.2026 and this order have been processed and some demand has been created/raised, the same would be kept in abeyance, pending adjudication of the instant writ petition.

(b)

If some amount is found refundable, the same shall not be refunded. And in case, the amount has already been refunded, the same shall remain subject to outcome of the present writ petition.

9. The application stands disposed of, accordingly.

W.P.(C) 9365/2026

10. List on the date already fixed i.e., 03.09.2026.