Successor income-tax authority may continue pending proceedings without rehearing unless the assessee timely seeks reopening.

A successor income-tax authority may continue a pending proceeding from the stage reached by the predecessor under section 5(7C) of the Indian Income-tax Act, 1922, unless the assessee, before such continuation, specifically demands reopening of the earlier proceeding or a fresh rehearing under the proviso. On the facts, no such demand was made: the assessee did not appear on the notified date, did not seek rehearing, and did not assert any prior request for reopening in the reference proceedings. The succeeding Commissioner could therefore validly proceed and pass the order under section 33B, and the challenge to his jurisdiction failed.

---

---

Issues: Whether a succeeding income-tax authority could validly continue proceedings under section 5(7C) of the Indian Income-tax Act, 1922, from the stage left by the predecessor authority without reopening the proceeding or affording a fresh rehearing, where the assessee had not demanded reopening or rehearing before continuation.

Analysis: Section 5(7C) permits a successor authority to continue a proceeding from the stage left by the predecessor. The proviso creates an exception only if the assessee demands, before continuation, that the previous proceeding or any part of it be reopened or that he be reheard before an order is passed. On the facts, no such demand was made. The assessee did not appear on the notified hearing date, did not seek rehearing at that stage, and did not assert in the reference proceedings that he had asked for reopening or rehearing. The Court distinguished the authorities relied upon by the assessee and followed the line of decisions holding that, absent a proper demand under the proviso, the successor may proceed.

Conclusion: The order passed by the succeeding Commissioner under section 33B was valid and legal, and the objection based on section 5(7C) failed.

Final Conclusion: The reference was answered in favour of the revenue, upholding the validity of the impugned order and rejecting the assessee's challenge to the successor Commissioner's jurisdiction.

Ratio Decidendi: A successor income-tax authority may continue a pending proceeding from the point reached by the predecessor unless the assessee, before continuation, specifically demands reopening or rehearing under the proviso to section 5(7C) of the Indian Income-tax Act, 1922.

---