The AO who issued my 148 notice was transferred and his successor issued another. Is the reassessment time-barred?
No. Section 129 lets the successor continue the proceeding from the stage at which the predecessor left it, so the later notice was a continuation and not an abandonment of the first. Limitation is tested against the first notice, and the Supreme Court reversed the High Court's contrary view.
Decided by the Supreme Court (Supreme Court of India - M.R. Shah J and M.M. Sundresh J) on 2022-11-03, reported as (2022) 449 ITR 239 (SC); 219 DTR 378; 329 CTR 457; 145 taxmann.com 157; (2023) 290 Taxman 377; Civil Appeal No. 8077 of 2022. It bears on section 129, section 148, section 143(3) of the Income Tax Act 1961, in Assessment & Scrutiny and Reassessment & Reopening matters.
This is revenue-favourable and closes off a limitation argument that was being run wherever an officer changed mid-reassessment. Once the reasons had been furnished after the first notice, the jurisdictional foundation was complete and the successor's communication was not a fresh assumption of jurisdiction. What survives for the assessee is the safeguard in s.129 itself: the right to demand that the proceeding be reopened or that he be reheard before any order is passed, rather than automatic invalidity.
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For assessment year 2008-09 the assessee filed a return declaring a loss of Rs 6,10,314, processed under s.143(1). After the Additional Commissioner's approval, a notice under s.148 was issued on 23 March 2015 and the reasons for reopening were supplied on 18 May 2015. That Assessing Officer was then transferred, and his successor issued a further s.148 notice on 18 January 2016 and again supplied reasons. Notices under ss.142(1) and 143(2) followed, the reasons were communicated on 23 February 2016, the assessee's objections were rejected on 21 March 2016, and the assessment order under s.143(3) was passed on 30 March 2016 adding Rs 1,35,00,000 on account of an accommodation entry. The assessee moved the Delhi High Court by writ petition on 1 April 2016; the High Court quashed both the reopening and the assessment order, holding that the second notice meant the first had been given up, that the second notice was therefore a fresh notice and barred by limitation, and that no reasons had been recorded when the second notice was issued.
The Supreme Court set aside the Delhi High Court's judgment. Section 129 permits the proceeding to be continued, on a change of Assessing Officer, from the stage at which it stood before the previous officer, so the second s.148 notice of 18 January 2016 was not required at all and its issue did not amount to dropping the first notice of 23 March 2015. The reasons had already been furnished after the first notice; the High Court should have examined those, not the reasons recorded after the second. The finding that the reassessment was barred by limitation therefore could not stand, the assessment order having been passed on the first notice. The Court decided the reopening question only. It did not uphold the addition: because the assessee had never challenged the assessment order on merits, having gone to the High Court instead, the Court gave liberty to file an appeal before the Commissioner (Appeals) within four weeks, to be decided on its own merits, while barring the assessee from re-agitating the reopening or limitation there.
Section 129 is clear on its face: where one income-tax authority is succeeded by another, the successor may continue the proceeding from the stage at which the predecessor left it. On that footing the successor here needed no fresh notice at all, and the notice he did issue on 18 January 2016 was surplusage. It followed that issuing it could not be read as abandoning the notice of 23 March 2015, which was the notice the assessment order was in fact passed on. The reasons for reopening had already been furnished after that first notice, and the High Court had gone wrong in examining the reasons recorded after the second notice, which did not fall to be considered at all. Once the first notice held the field, the limitation objection fell away with it.
Section 129 of the Act permits to continue with the earlier proceedings in case of change of the Assessing Officer from the stage at which the proceedings were before the earlier Assessing Officer.
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Handle my notice → Ask a CA on WhatsAppNo. Section 129 lets the successor continue the proceeding from the stage at which the predecessor left it, so the later notice was a continuation and not an abandonment of the first. Limitation is tested against the first notice, and the Supreme Court reversed the High Court's contrary view. This was decided by the Supreme Court (Supreme Court of India - M.R. Shah J and M.M. Sundresh J) and bears on section 129, section 148, section 143(3) of the Income Tax Act 1961. It is reported as (2022) 449 ITR 239 (SC); 219 DTR 378; 329 CTR 457; 145 taxmann.com 157; (2023) 290 Taxman 377; Civil Appeal No. 8077 of 2022. This is revenue-favourable and closes off a limitation argument that was being run wherever an officer changed mid-reassessment. Once the reasons had been furnished after the first notice, the jurisdictional foundation was complete and the successor's communication was not a fresh assumption of jurisdiction. What survives for the assessee is the safeguard in s.129 itself: the right to demand that the proceeding be reopened or that he be reheard before any order is passed, rather than automatic invalidity. If it applies to you, the first step is this: When the officer changes mid-proceeding, exercise the s.129 safeguard in writing — ask that the proceeding be reopened or that you be reheard before any order is passed.
For assessment year 2008-09 the assessee filed a return declaring a loss of Rs 6,10,314, processed under s.143(1). After the Additional Commissioner's approval, a notice under s.148 was issued on 23 March 2015 and the reasons for reopening were supplied on 18 May 2015. That Assessing Officer was then transferred, and his successor issued a further s.148 notice on 18 January 2016 and again supplied reasons. Notices under ss.142(1) and 143(2) followed, the reasons were communicated on 23 February 2016, the assessee's objections were rejected on 21 March 2016, and the assessment order under s.143(3) was passed on 30 March 2016 adding Rs 1,35,00,000 on account of an accommodation entry. The assessee moved the Delhi High Court by writ petition on 1 April 2016; the High Court quashed both the reopening and the assessment order, holding that the second notice meant the first had been given up, that the second notice was therefore a fresh notice and barred by limitation, and that no reasons had been recorded when the second notice was issued. The matter was decided on 2022-11-03 by the Supreme Court (Supreme Court of India - M.R. Shah J and M.M. Sundresh J). On those facts the Supreme Court held as follows. The Supreme Court set aside the Delhi High Court's judgment. Section 129 permits the proceeding to be continued, on a change of Assessing Officer, from the stage at which it stood before the previous officer, so the second s.148 notice of 18 January 2016 was not required at all and its issue did not amount to dropping the first notice of 23 March 2015. The reasons had already been furnished after the first notice; the High Court should have examined those, not the reasons recorded after the second. The finding that the reassessment was barred by limitation therefore could not stand, the assessment order having been passed on the first notice. The Court decided the reopening question only. It did not uphold the addition: because the assessee had never challenged the assessment order on merits, having gone to the High Court instead, the Court gave liberty to file an appeal before the Commissioner (Appeals) within four weeks, to be decided on its own merits, while barring the assessee from re-agitating the reopening or limitation there.
Section 129 is clear on its face: where one income-tax authority is succeeded by another, the successor may continue the proceeding from the stage at which the predecessor left it. On that footing the successor here needed no fresh notice at all, and the notice he did issue on 18 January 2016 was surplusage. It followed that issuing it could not be read as abandoning the notice of 23 March 2015, which was the notice the assessment order was in fact passed on. The reasons for reopening had already been furnished after that first notice, and the High Court had gone wrong in examining the reasons recorded after the second notice, which did not fall to be considered at all. Once the first notice held the field, the limitation objection fell away with it. In the words reproduced by the source cited on this page: "Section 129 of the Act permits to continue with the earlier proceedings in case of change of the Assessing Officer from the stage at which the proceedings were before the earlier Assessing Officer."
It was decided by the Supreme Court on 2022-11-03 and is reported as (2022) 449 ITR 239 (SC); 219 DTR 378; 329 CTR 457; 145 taxmann.com 157; (2023) 290 Taxman 377; Civil Appeal No. 8077 of 2022. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 129, section 148, section 143(3), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The Supreme Court set aside the Delhi High Court's judgment. Section 129 permits the proceeding to be continued, on a change of Assessing Officer, from the stage at which it stood before the previous officer, so the second s.148 notice of 18 January 2016 was not required at all and its issue did not amount to dropping the first notice of 23 March 2015. The reasons had already been furnished after the first notice; the High Court should have examined those, not the reasons recorded after the second. The finding that the reassessment was barred by limitation therefore could not stand, the assessment order having been passed on the first notice. The Court decided the reopening question only. It did not uphold the addition: because the assessee had never challenged the assessment order on merits, having gone to the High Court instead, the Court gave liberty to file an appeal before the Commissioner (Appeals) within four weeks, to be decided on its own merits, while barring the assessee from re-agitating the reopening or limitation there. It arises in Assessment & Scrutiny and Reassessment & Reopening matters, on section 129, section 148, section 143(3) of the Income Tax Act 1961, and was decided by Supreme Court of India - M.R. Shah J and M.M. Sundresh J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Check the file for when the recorded reasons were furnished; that is what completes the jurisdictional foundation and fixes which notice limitation runs from. Do not build a case on the successor's later notice being a fresh or superseding notice — put your effort into the merits of the reopening instead.
Still good law. A separate later-treatment search found the Supreme Court decision reported across ITR, DTR, CTR and Taxman, with the editorial note recording that the contrary Delhi High Court judgment — Mastech Technologies Pvt. Ltd. v. Dy. CIT (2018) 407 ITR 242 — stands reversed. No subsequent doubting or distinguishing at Supreme Court level was found. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order decides the reopening point and nothing else. The assessee, having gone to the High Court by writ rather than appealing, was given four weeks to file an appeal before the Commissioner (Appeals) against the assessment order on its merits, and was barred from re-agitating reopening or limitation there. Do not cite this case for the outcome of the addition. The Court did not consider the proviso to s.129, which gives the assessee the right to demand that the proceeding be reopened or that he be reheard before an order is passed; that right is nowhere discussed in the order, so this is not authority on how it operates. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Supreme Court set aside the Delhi High Court's judgment. Section 129 permits the proceeding to be continued, on a change of Assessing Officer, from the stage at which it stood before the previous officer, so the second s.148 notice of 18 January 2016 was not required at all and its issue did not amount to dropping the first notice of 23 March 2015. The reasons had already been furnished after the first notice; the High Court should have examined those, not the reasons recorded after the second. The finding that the reassessment was barred by limitation therefore could not stand, the assessment order having been passed on the first notice. The Court decided the reopening question only. It did not uphold the addition: because the assessee had never challenged the assessment order on merits, having gone to the High Court instead, the Court gave liberty to file an appeal before the Commissioner (Appeals) within four weeks, to be decided on its own merits, while barring the assessee from re-agitating the reopening or limitation there.
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