Limitation u/s 275 of the it act, 1961

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M L Babu (Querist)
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18 February 2015 The audited return for AY 2011-12 of an individual assessee u/s 44AB was filed belatedly on 24/12/2011.The assessment was completed u/s 143(3) on 27th March 2014.Now after 10 months, on 3rd February 2015 a show cause notice was issued u/s 274 why penalty u/s 271B should not be levied. My question is whether limitation u/s 275[1] (c) will apply for issuance of penalty notice. Can penalty proceedings be initiated after 31st March 2014, by which the assessment could have been time barred.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 February 2015 Penalty proceedings can be INITIATED at any time meaning thereby no limitation period. But there is limitation to COMPLETE the penalty proceedings vide section 275 of the Income tax Act,1961.

M L Babu

M L Babu (Querist)
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12 March 2015 Sir, in my case there is no any indication as that the the penalty proceedings shall be initiated separately, in the assessment order. Likewise my assessment order u/s 143(3) was on 26th March 2014.The assessment related to AY 2011-12. Whether the limitation contained u/s 275(ii) shall apply in this case. Likewise the practice manual issued by the ICAI for May Final exam, the same issue was quoted. The ICAI material says that in relation to an assessment u/s 143(3) for AY 2011-12 any notice u/s 271B rws 284 shall not be valid if not issued before 6 months after completion of month in which the assessment was made.Therefore any notice issued after 30th September 2014 will not be justified. Will you please enlighten me on this matter.

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