Limitation for penalty orders under Section 275(1)(c) governs Section 271C proceedings; time-barred penalties cannot survive.

Penalty proceedings under Section 271C must be concluded within the limitation period prescribed by Section 275(1)(c); if the penalty order is passed after that statutory period expires, it cannot stand. The Tribunal applied this principle to a case arising from a failure to deduct tax at source, held that the order was time-barred, and quashed the penalty in favour of the assessee.

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Issues: Whether the penalty order under Section 271C was barred by limitation under Section 275(1)(c).

Analysis: The penalty proceedings were initiated by the revenue authorities through a reference and show-cause process, but the order imposing penalty was passed after the expiry of the limitation period prescribed under Section 275(1)(c). The governing principle applied was that where the statutory time limit for passing the penalty order has expired, the order cannot survive, even if the underlying default relates to failure to deduct tax at source under Chapter XVIIB.

Conclusion: The penalty order was barred by limitation and was quashed in favour of the assessee.

Ratio Decidendi: A penalty order passed after the expiry of the limitation period under Section 275(1)(c) is void and liable to be set aside.

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