Section 472 — Bar of limitation for imposing penalties. Successor to s.275 of the 1961 Act.
Section 472 is in Chapter XXI — Penalties, which runs from section 439 to section 472.
Sub-section (1) bars a penalty order under the Chapter after six months from the end of the quarter in which one of four events falls: completion of the proceedings in the course of which penalty action was initiated, where the assessment or other order is not under appeal under section 356, 357 or 362; the passing of the revision order, where it is the subject of revision under section 377 or 378; receipt of the appellate order by the jurisdictional Principal Commissioner or Commissioner, where it is under appeal; and the issue of the penalty notice in any other case. Sub-section (2) allows a penalty order to be revised — imposed, enhanced, reduced, cancelled, or the proceedings dropped — on the basis of the assessment as revised by giving effect to an order under section 356, 357, 362, 365 or 367 or a revision under section 377 or 378. Sub-section (3) requires the assessee to be heard or given a reasonable opportunity before any such revised order, and fixes its own six-month limit from the end of the quarter in which the appellate order is received by the Principal Commissioner or Commissioner or the revision order is passed. Sub-section (4) applies section 471(2) to orders imposing, enhancing or reducing penalty, and sub-section (5) excludes from the limitation period the time taken to give the assessee a rehearing under section 244(2) and the period a court stay was in force, ending on receipt of the certified copy of the vacating order.
It puts an outer date on penalty proceedings so a taxpayer is not left exposed indefinitely, while measuring that date from the event that actually settles the underlying assessment — completion, appellate order received, or revision passed. The exclusions in sub-section (5) stop the department losing time it did not control.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Limitation for a penalty order | Six months from the end of the quarter | The quarter in which the proceedings are completed, the revision order is passed, the appellate order is received by the jurisdictional Principal Commissioner or Commissioner, or the penalty notice is issued, according to which of the four clauses applies | Sub-section (1) |
| Limitation for a penalty order revised on the basis of an appellate or revision order | Six months from the end of the quarter | The quarter in which the order under section 356, 357, 362, 365 or 367 is received by the jurisdictional Principal Commissioner or Commissioner, or the revision order under section 377 or 378 is passed; the assessee must also be heard | Sub-section (3) |
| Periods excluded from limitation | Time taken for a rehearing under section 244(2), and the period of a court stay | The stay period runs to the date the certified copy of the order vacating the stay is received by the jurisdictional Principal Commissioner or Commissioner | Sub-section (5) |
Identify which clause of sub-section (1) governs before counting: the trigger is different depending on whether the assessment is under appeal, under revision, or neither, and where it is under appeal the clock starts on the Commissioner's receipt of the appellate order rather than its date. Because the period runs from the end of the quarter, the last date is always a quarter-end plus six months, which is worth working out from the file. If the penalty is being revised after an appellate or revision order, sub-section (3) makes a hearing mandatory, so an order passed without one is open to challenge on that ground alone. Court stay periods and rehearing time under section 244(2) are excluded, so a bare calendar computation can be misleading.
Penalty proceedings are initiated in the course of an assessment completed on 20 May 2027, and the assessment is not carried in appeal. The clock in clause (1)(a) runs from the end of the quarter in which the proceedings were completed, that is 30 June 2027, so a penalty order passed on or after 1 January 2028 is barred — the six months are counted from the quarter end, never from the date of the order. If instead the assessment goes in appeal and the appellate order reaches the jurisdictional Principal Commissioner on 12 February 2028, clause (1)(c) starts the period from 31 March 2028 and the last date is 30 September 2028 — the date of receipt governs, not the date the appellate order bears. Time during which a court stay was in force, ending when the certified copy of the vacating order is received, and time given for a rehearing under section 244(2), are both excluded, so a bare calendar count can mislead.
In the penalty order itself, whose validity turns on this section, and in an appeal against it where limitation is taken as a ground. The record to check is the jurisdictional Principal Commissioner's or Commissioner's receipt of the appellate order, and any order of stay and the order vacating it.
No order imposing a penalty under this Chapter shall be passed after the expiry of six months from the end of the quarter in which
See the full 1961 to 2025 concordance.