Limitation for penalty proceedings can render a delayed penalty order void ab initio and unsustainable under the Income-tax Act.

Penalty under section 271B was analysed for limitation under section 275(1)(c) of the Income-tax Act, 1961. The text notes that the penalty notice was issued on 25.12.2019, but the penalty order was passed only on 30.07.2021, beyond the statutory time limit. On that basis, the order is described as having been passed without jurisdiction, barred by limitation, void ab initio, and unsustainable, with the assessee succeeding.

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Issues: Whether the penalty imposed under section 271B was barred by limitation under section 275(1)(c) of the Income-tax Act, 1961 and therefore unsustainable.

Analysis: The penalty notice was issued on 25.12.2019 and the order was required to be passed within the statutory period prescribed under section 275(1)(c). The penalty order, however, was passed on 30.07.2021, beyond the permissible time limit. As the statutory condition for valid imposition of penalty was not complied with, the order was treated as having been passed without jurisdiction.

Conclusion: The penalty order was held to be barred by limitation, void ab initio, and unsustainable; the assessee succeeded.

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