Limitation for section 271D penalty runs from the first initiation notice, making the penalty time-barred.

For penalty proceedings under section 271D of the Income-tax Act, 1961, limitation is reckoned from the date of the first show-cause notice initiating the proceedings, not from a later notice issued by the competent authority. Applying that rule, the penalty order was treated as time-barred, and the limitation objection succeeded in favour of the assessee. The appeal was therefore dismissed on the limitation issue.

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Issues: Whether the penalty under section 271D of the Income-tax Act, 1961 was barred by limitation, and the date from which limitation was to be reckoned for the penalty proceedings.

Analysis: The parties accepted that the controlling issue had already been decided by the Court in an earlier decision. The governing principle applied was that, for penalty proceedings under section 271D, limitation was to be computed from the date of the first show-cause notice issued for initiation of the proceedings, not from the date when the competent authority later issued its own notice. On that basis, the penalty order was treated as time-barred.

Conclusion: The limitation objection succeeded and the appeal was not maintainable on the merits of the penalty issue; the result was in favour of the assessee.

Final Conclusion: The appeal was dismissed by applying the previously decided rule on limitation in penalty proceedings under section 271D.

Ratio Decidendi: For penalty proceedings under section 271D of the Income-tax Act, 1961, limitation runs from the first notice initiating the proceedings, and not from a later notice issued by the competent authority.

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