Limitation for penalty proceedings starts at initiation, not the penalty order date, making the Section 271C order time-barred.

Penalty under Section 271C was held to be time-barred under Section 275(1)(c) because limitation runs from the date of initiation of penalty proceedings, namely when the assessing authority recommended issue of notice, not from the later date of the penalty order. On the facts, the limitation period expired on 31 March 2016, but the order was passed on 19 April 2016. The penalty order was therefore beyond the prescribed time limit and was quashed.

---

---

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

Analysis: The limitation for passing the penalty order was held to run from the date of initiation of penalty proceedings, namely the date on which the assessing authority recommended issuance of notice. On the facts, the relevant limitation expired on 31 March 2016, whereas the penalty order was passed on 19 April 2016. The order was therefore beyond the prescribed time limit.

Conclusion: The penalty order was barred by limitation and was quashed.

Ratio Decidendi: For purposes of Section 275(1)(c), limitation for penalty proceedings begins from the date of initiation of those proceedings and not from the later date of the penalty order.

---