TaxTMI 
TaxTMI 
Legal Safeguards and Procedural Continuity under Indian Income Tax Law : Clause 244 of Income Tax Bill, 2025 Vs. Section 129 of Income Tax Act, 1961
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....he Income Tax Bill, 2025 ("Clause 244") and Section 129 of the Income Tax Act, 1961 ("Section 129") are statutory provisions that address this specific scenario: the change of the incumbent of an office in the context of ongoing income-tax proceedings. This commentary provides a comprehensive analysis of Clause 244, its objectives, detailed provisions, practical implications, and a comparative examination with the existing Section 129. The analysis is structured to elucidate the nuances, legislative intent, and potential areas of ambiguity or reform, with a focus on the rights of the assessee and the powers of the tax authorities. Objective and Purpose Legislative Intent Both Clause 244 and Section 129 are designed to ensure continuity ....
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....jurisdiction and is succeeded by another who has and exercises jurisdiction, the income-tax authority so succeeding may continue the proceeding from the stage at which the proceeding was left by his predecessor. (2) Before the proceeding referred to in sub-section (1) is so continued, the assessee concerned may demand that-- (a) the previous proceeding or any part thereof be reopened; or (b) he be reheard before any order of assessment is passed against him. Breakdown and Interpretation of Key Provisions * Sub-section (1): Succession of Jurisdiction and Continuation of Proceedings * This sub-section empowers the succeeding income-tax authority to continue proceedings from the stage left by the predecessor. The language is clear and ....
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....rs, which are quasi-judicial in nature and have substantial civil consequences for the taxpayer. Ambiguities and Issues in Interpretation * Scope of "Reopening": The phrase "previous proceeding or any part thereof be reopened" is not defined. It may be interpreted to mean that the assessee can request a de novo hearing or a limited reopening on specific issues. The extent to which the proceedings can be reopened, and whether this includes the right to re-examine evidence or cross-examine witnesses, may be subject to judicial interpretation. * Timing and Procedure: The provision does not specify a time limit within which the assessee must exercise the right to demand reopening or rehearing. Nor does it prescribe a formal procedure for m....
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....rocedures to avoid waiver or estoppel. * The right to rehearing may be particularly valuable in complex assessments or where the predecessor authority's conduct of the proceedings is perceived as unfair or inadequate. For Legal Practitioners and Advisors * The provision underscores the importance of monitoring changes in jurisdiction and advising clients on the strategic exercise of the right to reopening or rehearing. * Legal practitioners should be prepared to challenge proceedings where the successor authority fails to accord the assessee the opportunity to demand reopening or rehearing, as non-compliance may vitiate the proceedings. Comparative Analysis: Clause 244 of the Income Tax Bill, 2025 vs. Section 129 of the Income T....
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....th provisions make the right to demand reopening or rehearing exercisable at the option of the assessee and do not make it automatic. * The language in Clause 244(2) ("may demand that- (a)...(b)") is more explicit and separated, whereas Section 129 uses a more condensed form. This may aid in better understanding and invocation of rights by assessees. * Procedural Aspects: * Neither provision prescribes the procedure for making a demand, nor does it specify time limits or consequences of failure to exercise the right. This remains an area for administrative clarification or judicial interpretation. * Legislative Modernization: * Clause 244 is part of a broader legislative effort to modernize, consolidate, and clarify income-tax law....
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....s, especially where there is a history of delay or abuse of process by the assessee. The provision does not address this tension explicitly. * Technological Developments: With increasing digitization of tax administration, the practical impact of change of incumbent may be less pronounced, but the right to rehearing remains important in cases involving oral hearings or subjective assessment. Conclusion Clause 244 of the Income Tax Bill, 2025, faithfully restates and clarifies the provisions of Section 129 of the Income Tax Act, 1961, governing the change of incumbent of an office in income-tax proceedings. The provision embodies a balanced approach, facilitating administrative continuity while safeguarding the procedural rights of taxpa....