Reasonable time limits for penalty proceedings apply where no express limitation period is prescribed, barring delayed notices.

Penalty proceedings under Section 45A, despite no express limitation period, must begin within a reasonable time. The five-year periods applicable to assessment and escaped-turnover assessment provide the relevant benchmark. A show cause notice issued after that period is time-barred, and earlier communications or alleged non-cooperation do not extend the permissible period. For the relevant assessment year, proceedings had to be initiated before the applicable five-year deadline; the later notice was therefore barred by limitation and set aside.

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Issues: Whether penalty proceedings under Section 45A, which prescribes no express limitation period, were initiated within a reasonable time.

Analysis: Although Section 45A contains no prescribed period for initiation of penalty proceedings, such proceedings must be commenced within a reasonable period. The analogous five-year periods governing assessment and escaped-turnover assessment under Sections 17 and 19 provide the applicable benchmark. A show cause notice issued beyond that period is time barred notwithstanding prior communications or alleged non-cooperation by the assessee. The notice concerning assessment year 2011-12 was required to be initiated before 31.03.2017 but was issued on 27.12.2017.

Conclusion: The penalty notice was barred by limitation and was set aside, in favour of the assessee.

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