Limitation for penalty orders under section 271E barred the impugned levy where the statutory period had already expired.

A penalty order under section 271E was found to be barred by limitation under section 275(1) of the Income-tax Act, 1961. The penalty was initiated in connection with proceedings under sections 143(3) and 263, but on either basis the statutory period for passing the penalty order had already expired before the impugned order was made. The order was therefore beyond the prescribed time limit and was quashed, with the assessee succeeding on the limitation issue.

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Issues: Whether the penalty order under section 271E was barred by limitation under section 275(1) of the Income-tax Act, 1961.

Analysis: The penalty was initiated in relation to proceedings under sections 143(3) and 263 of the Income-tax Act, 1961. On either basis, the period prescribed under section 275(1) had expired before the impugned penalty order was passed. The order was therefore beyond the statutory time limit.

Conclusion: The penalty order was held to be time-barred and was quashed. The assessee succeeded on the limitation issue.

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