Limitation for Section 201 proceedings bars notice and consequential order once the statutory outer limit expires.

Action under Section 201 of the Income-tax Act was barred by limitation because the statute, as applicable from 01.04.2010, allowed an order only up to 31.03.2011 in the relevant circumstances. A notice issued on 17.02.2014 was beyond the prescribed outer limit, so the proceedings could not validly continue and the consequential order could not survive. The notice and order were therefore time-barred and set aside.

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Issues: Whether the notice and consequential order under Section 201 of the Income-tax Act, 1961 were barred by limitation for the financial year 2007-2008.

Analysis: Section 201(3) of the Income-tax Act, 1961, introduced with effect from 01.04.2010, permitted passing of an order only up to 31.03.2011 in the circumstances governing the case. Since the notice was issued on 17.02.2014, the proceedings could not validly continue and the consequential order also could not stand.

Conclusion: The notice and the order were time-barred and were set aside.

Ratio Decidendi: Where the statute prescribes a specific outer limit for passing an order under Section 201, action initiated after expiry of that limit is barred by limitation and the consequential proceedings cannot survive.

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