The show-cause notice came a year after the AO referred the matter to the JCIT. Which date starts the s.275(1)(c) clock?
The reference, not the show-cause notice. The expression 'action for the imposition of penalty is initiated' in s.275(1)(c) refers to the date on which the first introductory step for such action is taken. The Assessing Officer's reference to the Joint Commissioner was that step, so the penalty order passed on the footing of the later show-cause notice was out of time.
Decided by the High Court (Delhi High Court — Vibhu Bakhru and Swarana Kanta Sharma JJ) on 2024-11-06, reported as [2024] 168 taxmann.com 634 / [2025] 302 Taxman 187 (Delhi); IT Appeal No. 547 of 2024. It bears on section 275, section 275(1)(c), section 271C of the Income Tax Act 1961, in Penalty and TDS Defaults matters.
Section 275(1)(c) is the limb that governs every penalty not tied to an assessment order under appeal — the TDS penalties under ss.271C and 271CA, the cash-transaction penalties under ss.271D and 271E, and any concealment or under-reporting penalty where the assessment was never appealed. The department's habit is to date initiation from its own show-cause notice, which can be issued a year or more after the file moved. This decision fixes the earlier date.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2011-12 the assessee filed its return on 30 November 2011 declaring a loss of Rs 2,62,04,18,432. Its tax audit report reported that it had not deducted Rs 5,00,40,103 of tax at source that was deductible. The scrutiny assessment under s.143(3) was completed on 26 March 2014, and the Assessing Officer, treating the default as admitted on the face of the audit report, made a reference to the Joint Commissioner (TDS), Range 76, Delhi on 25 September 2014. The Joint Commissioner took no step for nearly a year, issued a show-cause notice on 4 August 2015 and passed an order on 25 February 2016 levying penalty of Rs 5,00,40,103 under s.271C. The Commissioner (Appeals), by order of 16 August 2017, deleted the penalty as barred by limitation under s.275(1)(c), and the Tribunal dismissed the Revenue's appeal on 29 April 2024. The Revenue appealed under s.260A.
The Revenue's appeal was dismissed. The Court held that it found no infirmity in the Tribunal's conclusion that the penalty proceedings had been initiated at the earliest on 25 September 2014, the date of the Assessing Officer's reference, and not on 4 August 2015, the date of the show-cause notice, so that the penalty order of 25 February 2016 was barred by limitation under s.275(1)(c) (para 21). The disposal is under s.260A: the Court concluded that no substantial question of law arose in the appeal and dismissed it on that footing (paras 22 and 23), so what it does is decline to disturb the concurrent findings below rather than lay down a rule of its own from first principles.
The Court treated the question as squarely covered in the assessee's favour by its own earlier decision in Pr. CIT v. JKD Capital & Finlease Ltd., which it followed (para 11). The Revenue sought to distinguish JKD Capital on the ground that the delay there ran to more than five years; the Court rejected that, holding that the decision rests on the principle that initiation of penalty proceedings cannot be delayed in an arbitrary manner and that initiation must be taken as the date on which the reference was made to the concerned officer, if not earlier (para 12). Because 'initiated' is not defined in the Act, it was construed in its ordinary sense, by reference to the Shorter Oxford, Webster's Third New International Dictionary and Words and Phrases, and to the Supreme Court's treatment of 'initiate any proceedings for contempt' in Om Prakash Jaiswal v. D.K. Mittal (paras 14 to 18). On that construction the reference to the Joint Commissioner, made because the officer had found an admitted default, was the first introductory step and marked the commencement of the action; the show-cause notice that followed was the stage at which the assessee was given an opportunity to answer, not the stage at which the action began (paras 19 and 20).
The expression 'action for imposition of penalty is initiated' must, thus, clearly refers to the date on which the first introductory step for such action is taken, it must necessarily mean the start of such action.
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Handle my notice → Ask a CA on WhatsAppThe reference, not the show-cause notice. The expression 'action for the imposition of penalty is initiated' in s.275(1)(c) refers to the date on which the first introductory step for such action is taken. The Assessing Officer's reference to the Joint Commissioner was that step, so the penalty order passed on the footing of the later show-cause notice was out of time. This was decided by the High Court (Delhi High Court — Vibhu Bakhru and Swarana Kanta Sharma JJ) and bears on section 275, section 275(1)(c), section 271C of the Income Tax Act 1961. It is reported as [2024] 168 taxmann.com 634 / [2025] 302 Taxman 187 (Delhi); IT Appeal No. 547 of 2024. Section 275(1)(c) is the limb that governs every penalty not tied to an assessment order under appeal — the TDS penalties under ss.271C and 271CA, the cash-transaction penalties under ss.271D and 271E, and any concealment or under-reporting penalty where the assessment was never appealed. The department's habit is to date initiation from its own show-cause notice, which can be issued a year or more after the file moved. This decision fixes the earlier date. If it applies to you, the first step is this: Ask for the whole penalty file, not just the show-cause notice — the reference from the Assessing Officer to the range head is the document that starts the clock.
For assessment year 2011-12 the assessee filed its return on 30 November 2011 declaring a loss of Rs 2,62,04,18,432. Its tax audit report reported that it had not deducted Rs 5,00,40,103 of tax at source that was deductible. The scrutiny assessment under s.143(3) was completed on 26 March 2014, and the Assessing Officer, treating the default as admitted on the face of the audit report, made a reference to the Joint Commissioner (TDS), Range 76, Delhi on 25 September 2014. The Joint Commissioner took no step for nearly a year, issued a show-cause notice on 4 August 2015 and passed an order on 25 February 2016 levying penalty of Rs 5,00,40,103 under s.271C. The Commissioner (Appeals), by order of 16 August 2017, deleted the penalty as barred by limitation under s.275(1)(c), and the Tribunal dismissed the Revenue's appeal on 29 April 2024. The Revenue appealed under s.260A. The matter was decided on 2024-11-06 by the High Court (Delhi High Court — Vibhu Bakhru and Swarana Kanta Sharma JJ). On those facts the High Court held as follows. The Revenue's appeal was dismissed. The Court held that it found no infirmity in the Tribunal's conclusion that the penalty proceedings had been initiated at the earliest on 25 September 2014, the date of the Assessing Officer's reference, and not on 4 August 2015, the date of the show-cause notice, so that the penalty order of 25 February 2016 was barred by limitation under s.275(1)(c) (para 21). The disposal is under s.260A: the Court concluded that no substantial question of law arose in the appeal and dismissed it on that footing (paras 22 and 23), so what it does is decline to disturb the concurrent findings below rather than lay down a rule of its own from first principles.
The Court treated the question as squarely covered in the assessee's favour by its own earlier decision in Pr. CIT v. JKD Capital & Finlease Ltd., which it followed (para 11). The Revenue sought to distinguish JKD Capital on the ground that the delay there ran to more than five years; the Court rejected that, holding that the decision rests on the principle that initiation of penalty proceedings cannot be delayed in an arbitrary manner and that initiation must be taken as the date on which the reference was made to the concerned officer, if not earlier (para 12). Because 'initiated' is not defined in the Act, it was construed in its ordinary sense, by reference to the Shorter Oxford, Webster's Third New International Dictionary and Words and Phrases, and to the Supreme Court's treatment of 'initiate any proceedings for contempt' in Om Prakash Jaiswal v. D.K. Mittal (paras 14 to 18). On that construction the reference to the Joint Commissioner, made because the officer had found an admitted default, was the first introductory step and marked the commencement of the action; the show-cause notice that followed was the stage at which the assessee was given an opportunity to answer, not the stage at which the action began (paras 19 and 20). In the words reproduced by the source cited on this page: "The expression 'action for imposition of penalty is initiated' must, thus, clearly refers to the date on which the first introductory step for such action is taken, it must necessarily mean the start of such action."
It was decided by the High Court on 2024-11-06 and is reported as [2024] 168 taxmann.com 634 / [2025] 302 Taxman 187 (Delhi); IT Appeal No. 547 of 2024. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 275, section 275(1)(c), section 271C, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed. The Court held that it found no infirmity in the Tribunal's conclusion that the penalty proceedings had been initiated at the earliest on 25 September 2014, the date of the Assessing Officer's reference, and not on 4 August 2015, the date of the show-cause notice, so that the penalty order of 25 February 2016 was barred by limitation under s.275(1)(c) (para 21). The disposal is under s.260A: the Court concluded that no substantial question of law arose in the appeal and dismissed it on that footing (paras 22 and 23), so what it does is decline to disturb the concurrent findings below rather than lay down a rule of its own from first principles. It arises in Penalty and TDS Defaults matters, on section 275, section 275(1)(c), section 271C of the Income Tax Act 1961, and was decided by Delhi High Court — Vibhu Bakhru and Swarana Kanta Sharma JJ. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the penalty is levied by an authority other than the assessing officer, look for the internal reference or proposal and date initiation from it. Compute the outer date as the later of the end of the financial year in which the connected proceedings were completed and six months from the end of the month of that first step. Take limitation as a separate, self-contained ground; it does not depend on the merits of the default.
Under appeal, and the appeal has not been decided. Under appeal, but only at the notice stage: leave has not been granted, no stay has been made and nothing has been decided. On 16 October 2025 a Bench of J.B. Pardiwala and K.V. Viswanathan, JJ. condoned the delay and issued notice on the Commissioner's special leave petition, SLP (Civil) Diary No. 51546/2025, directed against ITA No. 547/2024 dated 6 November 2024, and tagged it with SLP (C) No. 13347/2025; the assessee's advocate-on-record accepted and waived formal notice. The judgment therefore stands and binds, but it should not be cited as settled. The status label on this entry has been moved from 'superseded by amendment' to 'under appeal' because the pending petition is the live risk to a citation; the supersession point is unaffected and is set out next. No decision doubting this order was traced, and no later decision applying or following it was found either. Its statutory footing has in any event been replaced. Section 88 of the Finance Act 2025 substituted a new s.275, and the corresponding provision in the Income-tax Act 2025 is s.472, read in an Acts module: it fixes six months from the end of the quarter in which the relevant event occurs, and the residual limb, s.472(1)(d), runs from the date on which the notice for imposition of penalty is issued in any other case. That is the very date this judgment held was not the date of initiation, so the construction here does not carry into orders governed by the substituted text. For proceedings governed by the old s.275(1)(c) the reasoning stands, and it rests on the Delhi line in Pr. CIT v. JKD Capital & Finlease Ltd., IT Appeal No. 780 of 2015 decided on 13 October 2015, which this judgment cites as (2015) 378 ITR 614 (Delhi) and which it follows. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The date is 6 November 2024, and the bench is Vibhu Bakhru and Swarana Kanta Sharma JJ in IT Appeal No. 547 of 2024. The order is a s.260A dismissal on the footing that no substantial question of law arises, so its force comes from the earlier Delhi decision it follows, Pr. CIT v. JKD Capital & Finlease Ltd. [2017] 81 taxmann.com 80 / 378 ITR 614 (Delhi), rather than from a fresh rule. Two small inconsistencies on the face of the report: para 10 gives the show-cause notice date as 4 August 2014 where the rest of the order gives 4 August 2015, and the returned loss is Rs 262 crore, not the Rs 2.62 crore an earlier note recorded. The decision concerned a s.271C penalty under the residual limb s.275(1)(c), so its application to a s.271(1)(c) or s.270A penalty falling under the same limb is by analogy and was not directly decided. The (2025) 479 ITR 263 citation reported elsewhere does not appear on the citation line in the database consulted and is not carried here. The judgment has now been read. It does not say what counts as the first introductory step where penalty is initiated by a direction in the assessment order itself rather than by a reference to another officer, and it does not address the position under the substituted s.275, whose residual limb runs from the issue of the penalty notice. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed. The Court held that it found no infirmity in the Tribunal's conclusion that the penalty proceedings had been initiated at the earliest on 25 September 2014, the date of the Assessing Officer's reference, and not on 4 August 2015, the date of the show-cause notice, so that the penalty order of 25 February 2016 was barred by limitation under s.275(1)(c) (para 21). The disposal is under s.260A: the Court concluded that no substantial question of law arose in the appeal and dismissed it on that footing (paras 22 and 23), so what it does is decline to disturb the concurrent findings below rather than lay down a rule of its own from first principles.
TaxSphere, “CIT (TDS) v Turner General Entertainment Networks India”, https://taxnotice.vittsphere.com/caselaw/case/cit-tds-v-turner-general-entertainment-275-1-c/ (validity last checked 2026-08-20)
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My assessment order says penalty under sections 271D and 271E is initiated. The Joint Commissioner issued his notice months later and passed the penalty order after that. Does time run from the assessment order or from his notice?
The Joint Commissioner passed a penalty order months after the assessment was completed. From what date does the six-month limitation in section 275 actually run — the reference to him, or his own show-cause notice?
The CIT(A) order came two years ago but the appeal is still in the Tribunal. Is the penalty already time-barred?
The liability was created by a journal entry and no money moved. Does 269SS still apply?
