My case was moved between charges during a restructuring and the department says that gives it extra time under Explanation 1 to s.153 because of s.129. Is that right?
No. The extension in Explanation 1 to s.153 for time taken in reopening a proceeding or in giving an opportunity of being reheard is available only where the assessee has demanded a rehearing under the proviso to s.129 — and s.129 applies only to a change of the incumbent of an office, not to a change of jurisdiction, which is s.127. Where the case simply moved from one jurisdiction to another and no rehearing was asked for, no time is excluded and the assessment is time-barred.
Decided by the ITAT (Pavan Kumar Gadale JM and Girish Agrawal AM) on 2024-12-31, reported as ITA No. 2767/MUM/2024, Assessment Year 2011-12 (ITAT Mumbai, 'J' Bench). It bears on section 129, section 127, section 153, section 144C, section 143(3) of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
Departmental limitation computations lean on Explanation 1 to s.153 far more often than they are checked, and 'cadre restructuring' is the standard justification. This order draws the two lines that defeat it. First, the s.129/s.127 line: s.129 covers one officer succeeding another in the same office with no change of jurisdiction; a transfer from one charge to another is s.127, and s.127 buys the department nothing under Explanation 1. Second, the demand line: even in a genuine s.129 case, the extension is triggered by the assessee's demand for a rehearing, so a department that never received one cannot claim the time. The corollary is a real trap for the assessee — a rehearing demanded under s.129 stops the clock, so the demand must be made deliberately and with the limitation position in mind, never as a routine adjournment request. Read this together with CIT v S. P. Viz Construction Co. (No. 1), which is the older half of the same rule.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
For AY 2011-12 the assessee's final assessment order under s.143(3) read with s.144C was passed on 12 May 2015. The assessee took a ground that the order was barred by limitation, contending it ought to have been passed on or before 31 March 2015. The Departmental Representative answered that Explanation 1(i) to s.153 applied because this was a case of rehearing following cadre restructuring, so the extended time limit was available. It was submitted for the assessee that no proceedings had been undertaken before the incumbent Assessing Officer issued his notice and that the assessee had not requested any rehearing before him. The record showed that the assessee's case had moved between jurisdictions, from 6(2)(4) to 8(2)(3) and then to 10(3)(1).
Ground 1 was allowed and the appeal was allowed. Explanation 1 to s.153 applies only where an opportunity to be reheard is demanded by the assessee following the succession of one income-tax authority by another under s.129. On these facts there was a change of jurisdiction covered by s.127 and not a change of incumbent under s.129, and no rehearing had been requested, so the extension was not available. The final assessment order dated 12 May 2015 was held barred by limitation, having had to be passed on or before 31 March 2015.
The Tribunal reproduced Explanation 1 to s.153, which excludes in computing limitation 'the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129', and then reproduced s.129 itself, including the proviso under which 'the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard'. Reading the two together, the exclusion is triggered by a demand from the assessee, not by the succession itself. The Tribunal then held that the essential fact was that this was a change of jurisdiction and not a change of incumbent: cases transferred from one jurisdiction to another are governed by s.127, while s.129 speaks of a change in the incumbent of an office without any change of jurisdiction, and the extended time limit under Explanation 1 to s.153 is available only in the latter situation and only where the assessee exercises the opportunity of being reheard. The Departmental Representative's cadre-restructuring argument was therefore not tenable. The Tribunal drew support from the extract it reproduced from the Delhi High Court in Shibani Dutta, which had held on comparable facts that s.129 was not attracted where the case was one of transfer under s.127, that s.129 speaks of change of an incumbent of an office without any change of jurisdiction, and that there was accordingly no scope for invoking the corresponding exclusion to extend the period of limitation.
From the aforesaid provisions, we note that explanation 1 to section 153 of the Act applies in a case where an opportunity to rehear is demanded by the assessee pursuant to succession of one Income-tax authority by another u/s.129 of the Act.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppNo. The extension in Explanation 1 to s.153 for time taken in reopening a proceeding or in giving an opportunity of being reheard is available only where the assessee has demanded a rehearing under the proviso to s.129 — and s.129 applies only to a change of the incumbent of an office, not to a change of jurisdiction, which is s.127. Where the case simply moved from one jurisdiction to another and no rehearing was asked for, no time is excluded and the assessment is time-barred. This was decided by the ITAT (Pavan Kumar Gadale JM and Girish Agrawal AM) and bears on section 129, section 127, section 153, section 144C, section 143(3) of the Income Tax Act 1961. It is reported as ITA No. 2767/MUM/2024, Assessment Year 2011-12 (ITAT Mumbai, 'J' Bench). Departmental limitation computations lean on Explanation 1 to s.153 far more often than they are checked, and 'cadre restructuring' is the standard justification. This order draws the two lines that defeat it. First, the s.129/s.127 line: s.129 covers one officer succeeding another in the same office with no change of jurisdiction; a transfer from one charge to another is s.127, and s.127 buys the department nothing under Explanation 1. Second, the demand line: even in a genuine s.129 case, the extension is triggered by the assessee's demand for a rehearing, so a department that never received one cannot claim the time. The corollary is a real trap for the assessee — a rehearing demanded under s.129 stops the clock, so the demand must be made deliberately and with the limitation position in mind, never as a routine adjournment request. Read this together with CIT v S. P. Viz Construction Co. (No. 1), which is the older half of the same rule. If it applies to you, the first step is this: Before you argue limitation, work out which provision actually moved your file: same office, new officer, same jurisdiction is s.129; a transfer of the case from one charge to another is s.127. The department's own order of transfer will say.
For AY 2011-12 the assessee's final assessment order under s.143(3) read with s.144C was passed on 12 May 2015. The assessee took a ground that the order was barred by limitation, contending it ought to have been passed on or before 31 March 2015. The Departmental Representative answered that Explanation 1(i) to s.153 applied because this was a case of rehearing following cadre restructuring, so the extended time limit was available. It was submitted for the assessee that no proceedings had been undertaken before the incumbent Assessing Officer issued his notice and that the assessee had not requested any rehearing before him. The record showed that the assessee's case had moved between jurisdictions, from 6(2)(4) to 8(2)(3) and then to 10(3)(1). The matter was decided on 2024-12-31 by the ITAT (Pavan Kumar Gadale JM and Girish Agrawal AM). On those facts the ITAT held as follows. Ground 1 was allowed and the appeal was allowed. Explanation 1 to s.153 applies only where an opportunity to be reheard is demanded by the assessee following the succession of one income-tax authority by another under s.129. On these facts there was a change of jurisdiction covered by s.127 and not a change of incumbent under s.129, and no rehearing had been requested, so the extension was not available. The final assessment order dated 12 May 2015 was held barred by limitation, having had to be passed on or before 31 March 2015.
The Tribunal reproduced Explanation 1 to s.153, which excludes in computing limitation 'the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129', and then reproduced s.129 itself, including the proviso under which 'the assessee concerned may demand that before the proceeding is so continued the previous proceeding or any part thereof be reopened or that before any order of assessment is passed against him, he be reheard'. Reading the two together, the exclusion is triggered by a demand from the assessee, not by the succession itself. The Tribunal then held that the essential fact was that this was a change of jurisdiction and not a change of incumbent: cases transferred from one jurisdiction to another are governed by s.127, while s.129 speaks of a change in the incumbent of an office without any change of jurisdiction, and the extended time limit under Explanation 1 to s.153 is available only in the latter situation and only where the assessee exercises the opportunity of being reheard. The Departmental Representative's cadre-restructuring argument was therefore not tenable. The Tribunal drew support from the extract it reproduced from the Delhi High Court in Shibani Dutta, which had held on comparable facts that s.129 was not attracted where the case was one of transfer under s.127, that s.129 speaks of change of an incumbent of an office without any change of jurisdiction, and that there was accordingly no scope for invoking the corresponding exclusion to extend the period of limitation. In the words reproduced by the source cited on this page: "From the aforesaid provisions, we note that explanation 1 to section 153 of the Act applies in a case where an opportunity to rehear is demanded by the assessee pursuant to succession of one Income-tax authority by another u/s.129 of the Act." The decision followed or applied Shibani Dutta v. CIT(A) (2012) 26 taxmann.com 105 (Del) — extract reproduced and relied on for the s.127/s.129 distinction.
It was decided by the ITAT on 2024-12-31 and is reported as ITA No. 2767/MUM/2024, Assessment Year 2011-12 (ITAT Mumbai, 'J' Bench). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 129, section 127, section 153, section 144C, 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 taxpayer. Ground 1 was allowed and the appeal was allowed. Explanation 1 to s.153 applies only where an opportunity to be reheard is demanded by the assessee following the succession of one income-tax authority by another under s.129. On these facts there was a change of jurisdiction covered by s.127 and not a change of incumbent under s.129, and no rehearing had been requested, so the extension was not available. The final assessment order dated 12 May 2015 was held barred by limitation, having had to be passed on or before 31 March 2015. It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section 129, section 127, section 153, section 144C, section 143(3) of the Income Tax Act 1961, and was decided by Pavan Kumar Gadale JM and Girish Agrawal AM. 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. If it was s.127, say squarely that Explanation 1 to s.153 has no application and put the department to proof of any other exclusion it relies on. If it was s.129, check the record for any letter of yours demanding that the previous proceeding be reopened or that you be reheard. No demand, no exclusion. Reconstruct the limitation arithmetic on paper from the date the return was filed and the s.143(2) notice was served, through to the date the order was actually passed, and take the ground as ground 1 on the validity of the order rather than burying it behind the merits. Where you do want a rehearing after a change of incumbent, make the demand in writing and dated — but price in that the time taken will be excluded, and do not make it in a year where limitation is your best point.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator returns nothing. A name search returns 662 documents, but they are the company's trade mark and commercial litigation in the Delhi and Bombay High Courts and CESTAT excise matters; no income-tax appeal against this order appears. Nothing was found applying or doubting the holding that section 129 is not section 127 and confers no extra time in the absence of a demand. No source could be cited for that finding. 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.
Retrieved twice from the same URL. The second retrieval returned paragraph 11.1 in a shorter form than the first, stopping before the sentences distinguishing s.127 from s.129 and the comparative table; the quote used here is from the portion returned identically on both passes. The order reproduces a comparison table which does not survive transcription cleanly and has not been quoted. The jurisdiction history recorded in the table is a move from 6(2)(4) to 8(2)(3) and then to 10(3)(1). The order relies on Shibani Dutta v. CIT(A) (2012) 26 taxmann.com 105 (Del) for the s.127/s.129 distinction; that Delhi High Court decision was NOT retrieved or read for this entry — only the extract the Tribunal itself reproduces. This was a s.144C case, so the limitation date of 31 March 2015 turns on the DRP timetable as well as s.153; the entry does not attempt to restate that arithmetic. 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.
Ground 1 was allowed and the appeal was allowed. Explanation 1 to s.153 applies only where an opportunity to be reheard is demanded by the assessee following the succession of one income-tax authority by another under s.129. On these facts there was a change of jurisdiction covered by s.127 and not a change of incumbent under s.129, and no rehearing had been requested, so the extension was not available. The final assessment order dated 12 May 2015 was held barred by limitation, having had to be passed on or before 31 March 2015.
TaxSphere, “Novateur Electrical and Digital Systems Pvt Ltd v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/novateur-electrical-129-is-not-127-no-extra-time-without-a-demand/ (validity last checked 2026-09-08)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
The section 276CC complaint against me was filed by an Assistant Commissioner although my case was with the Income-tax Officer, and no assessment was ever made on the capital gain the complaint alleges. Can that prosecution stand?
A different Assessing Officer finished my assessment from where the last one left off, without offering me a rehearing. Does s.129 give me a right he was bound to offer?
The last panchnama in my client's search is dated 9 April 2025. By when must the block assessment order be passed?
The AO who issued my 148 notice was transferred and his successor issued another. Is the reassessment time-barred?
