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?
For a penalty that is not integrally linked to the assessment — here section 271D — limitation is governed by clause (c) of section 275(1) and runs from the completion of the proceedings in the course of which the action for penalty was initiated, or six months from the end of the month in which that action was taken, whichever expires later; not from the date the competent officer issues his own notice. On that footing a penalty order passed on 28 December 2024, where the reference went to the Addl./Jt. CIT on 18 June 2023 and the assessment was completed on 23 March 2024, was out of time on either computation, and the Revenue's appeals were dismissed.
Decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member) on 2025-11-10, reported as ITA Nos. 1057 to 1061/JP/2025 (ITAT Jaipur 'B' Bench); no law-report citation traced. It bears on section 275, section 275(1)(c), section 271D, section 271E, section 269SS, section 269T of the Income Tax Act 1961, in Penalty, Cash Transaction Limits, Appeals and How Tax Law Is Read matters.
Limitation is the ground that most often succeeds against a penalty, and this order shows why: it is jurisdictional, it needs no argument on the merits, and the Tribunal expressly upheld the CIT(A) for not deciding the merits once the proceeding was found time-barred. The order is also valuable for something else — it sets out section 275 as substituted by the Finance Act, 2025 with effect from 1 April 2025, under which the six-month period runs from the end of the QUARTER rather than the end of the month or the financial year. That substitution is why the old text governed here: the penalty order was passed on 28 December 2024, before it took effect. Any computation carried over from the older cases to a penalty order passed on or after 1 April 2025 will be wrong. Be aware that the initiation question is contested between High Courts: the Kerala High Court in Grihalaxmi Vision, relied on by the Departmental Representative, treats the penalty proceeding as beginning only with the competent officer's notice, while the Rajasthan High Court in Hissaria Bros ties it to the assessment; the Tribunal followed its own jurisdictional High Court and recorded that the Supreme Court had affirmed it.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The ACIT, Central Circle-2, Jaipur referred the matter to the Addl./Jt. CIT, Central, Jaipur by letter no. 194 dated 18-06-2023, stating that the assessee had accepted cash loans aggregating Rs 3,73,57,124 during the financial year 2011-12 relevant to assessment year 2012-13 in violation of section 269SS and had repaid Rs 3,81,68,450 in cash in violation of section 269T. The assessment order was passed on 23-03-2024. The Addl./Jt. CIT levied penalty under section 271D of Rs 3,31,05,285 in respect of a cash loan taken from one Radha Mohan Totla, by order dated 28-12-2024. The CIT(A) deleted the penalty as barred by limitation, without deciding the merits. The Revenue appealed on the merits and on the ground that the CIT(A) ought also to have decided the merits, relying on the Kerala High Court in Grihalaxmi Vision v Addl. CIT.
All the appeals of the Revenue were dismissed. Limitation for a section 271D penalty is governed by clause (c) of section 275(1); reckoned either from the reference of 18-06-2023 the penalty had to be imposed by 31 March 2024, and reckoned from the assessment order of 23-03-2024 by 30 September 2024, whereas it was imposed on 28-12-2024, so the order was barred by limitation. The CIT(A) having correctly decided the matter on the technical ground, he had rightly not gone on to the merits, and the Revenue's ground on that footing also failed.
The Tribunal set out section 275 both as it stood for the years in question and as substituted, and held that the limitation period was governed by clause (c) of section 275(1) — the penalty order had to be passed before the end of the financial year in which the proceedings in the course of which the action for imposition of penalty was initiated were completed, or six months from the end of the month in which the penalty was initiated, whichever expires later. It applied that to the two candidate starting points and found the order late on both. It followed its own coordinate bench in DCIT v Kiran Fine Jewellers Private Limited and, through it, the Rajasthan High Court in CIT v Hissaria Bros, which had held that penalty proceedings for defaults under sections 269SS and 269T are not related to the assessment proceedings but independent of them, so clause (a) of section 275(1) cannot be attracted and clause (c) governs. It declined to follow the Kerala High Court's contrary approach in Grihalaxmi Vision, cited by the Departmental Representative, on the ground that it had a binding precedent of its own jurisdictional High Court which had been confirmed by the Supreme Court. It added that even the Revenue had accepted the position by amending the law so that from 1 April 2025 a penalty under section 271D is to be imposed by the Assessing Officer, and reproduced the proviso to section 271D(2) to that effect.
Co joint reading of the provision of the law we note that the limitation period is governed by clause (c) of Section 275(1).
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Handle my notice → Ask a CA on WhatsAppFor a penalty that is not integrally linked to the assessment — here section 271D — limitation is governed by clause (c) of section 275(1) and runs from the completion of the proceedings in the course of which the action for penalty was initiated, or six months from the end of the month in which that action was taken, whichever expires later; not from the date the competent officer issues his own notice. On that footing a penalty order passed on 28 December 2024, where the reference went to the Addl./Jt. CIT on 18 June 2023 and the assessment was completed on 23 March 2024, was out of time on either computation, and the Revenue's appeals were dismissed. This was decided by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member) and bears on section 275, section 275(1)(c), section 271D, section 271E, section 269SS, section 269T of the Income Tax Act 1961. It is reported as ITA Nos. 1057 to 1061/JP/2025 (ITAT Jaipur 'B' Bench); no law-report citation traced. Limitation is the ground that most often succeeds against a penalty, and this order shows why: it is jurisdictional, it needs no argument on the merits, and the Tribunal expressly upheld the CIT(A) for not deciding the merits once the proceeding was found time-barred. The order is also valuable for something else — it sets out section 275 as substituted by the Finance Act, 2025 with effect from 1 April 2025, under which the six-month period runs from the end of the QUARTER rather than the end of the month or the financial year. That substitution is why the old text governed here: the penalty order was passed on 28 December 2024, before it took effect. Any computation carried over from the older cases to a penalty order passed on or after 1 April 2025 will be wrong. Be aware that the initiation question is contested between High Courts: the Kerala High Court in Grihalaxmi Vision, relied on by the Departmental Representative, treats the penalty proceeding as beginning only with the competent officer's notice, while the Rajasthan High Court in Hissaria Bros ties it to the assessment; the Tribunal followed its own jurisdictional High Court and recorded that the Supreme Court had affirmed it. If it applies to you, the first step is this: Take limitation as the first ground and plead it as jurisdictional; here it disposed of five appeals without the merits being reached at any stage.
The ACIT, Central Circle-2, Jaipur referred the matter to the Addl./Jt. CIT, Central, Jaipur by letter no. 194 dated 18-06-2023, stating that the assessee had accepted cash loans aggregating Rs 3,73,57,124 during the financial year 2011-12 relevant to assessment year 2012-13 in violation of section 269SS and had repaid Rs 3,81,68,450 in cash in violation of section 269T. The assessment order was passed on 23-03-2024. The Addl./Jt. CIT levied penalty under section 271D of Rs 3,31,05,285 in respect of a cash loan taken from one Radha Mohan Totla, by order dated 28-12-2024. The CIT(A) deleted the penalty as barred by limitation, without deciding the merits. The Revenue appealed on the merits and on the ground that the CIT(A) ought also to have decided the merits, relying on the Kerala High Court in Grihalaxmi Vision v Addl. CIT. The matter was decided on 2025-11-10 by the ITAT (Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member). On those facts the ITAT held as follows. All the appeals of the Revenue were dismissed. Limitation for a section 271D penalty is governed by clause (c) of section 275(1); reckoned either from the reference of 18-06-2023 the penalty had to be imposed by 31 March 2024, and reckoned from the assessment order of 23-03-2024 by 30 September 2024, whereas it was imposed on 28-12-2024, so the order was barred by limitation. The CIT(A) having correctly decided the matter on the technical ground, he had rightly not gone on to the merits, and the Revenue's ground on that footing also failed.
The Tribunal set out section 275 both as it stood for the years in question and as substituted, and held that the limitation period was governed by clause (c) of section 275(1) — the penalty order had to be passed before the end of the financial year in which the proceedings in the course of which the action for imposition of penalty was initiated were completed, or six months from the end of the month in which the penalty was initiated, whichever expires later. It applied that to the two candidate starting points and found the order late on both. It followed its own coordinate bench in DCIT v Kiran Fine Jewellers Private Limited and, through it, the Rajasthan High Court in CIT v Hissaria Bros, which had held that penalty proceedings for defaults under sections 269SS and 269T are not related to the assessment proceedings but independent of them, so clause (a) of section 275(1) cannot be attracted and clause (c) governs. It declined to follow the Kerala High Court's contrary approach in Grihalaxmi Vision, cited by the Departmental Representative, on the ground that it had a binding precedent of its own jurisdictional High Court which had been confirmed by the Supreme Court. It added that even the Revenue had accepted the position by amending the law so that from 1 April 2025 a penalty under section 271D is to be imposed by the Assessing Officer, and reproduced the proviso to section 271D(2) to that effect. In the words reproduced by the source cited on this page: "Co joint reading of the provision of the law we note that the limitation period is governed by clause (c) of Section 275(1)." The decision followed or applied CIT v. Hissaria Bros (Rajasthan High Court) — followed as the jurisdictional High Court, the Tribunal recording that it was affirmed by the Supreme Court in Hissaria Brothers, 386 ITR 719; DCIT v. Kiran Fine Jewellers Private Limited, ITA No. 268/JP/2024 (ITAT Jaipur) — followed as a coordinate bench; Grihalaxmi Vision v. Addl. CIT, Range-1, Kozhikode (Kerala High Court) — cited by the Revenue and not followed.
It was decided by the ITAT on 2025-11-10 and is reported as ITA Nos. 1057 to 1061/JP/2025 (ITAT Jaipur 'B' Bench); no law-report citation traced. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 275, section 275(1)(c), section 271D, section 271E, section 269SS, section 269T, 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. All the appeals of the Revenue were dismissed. Limitation for a section 271D penalty is governed by clause (c) of section 275(1); reckoned either from the reference of 18-06-2023 the penalty had to be imposed by 31 March 2024, and reckoned from the assessment order of 23-03-2024 by 30 September 2024, whereas it was imposed on 28-12-2024, so the order was barred by limitation. The CIT(A) having correctly decided the matter on the technical ground, he had rightly not gone on to the merits, and the Revenue's ground on that footing also failed. It arises in Penalty, Cash Transaction Limits, Appeals and How Tax Law Is Read matters, on section 275, section 275(1)(c), section 271D, section 271E, section 269SS, section 269T of the Income Tax Act 1961, and was decided by Dr. S. Seethalakshmi, Judicial Member and Shri Rathod Kamlesh Jayantbhai, Accountant Member. 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. Identify the correct clause of section 275(1) before you compute anything: a penalty independent of the assessment (sections 271D, 271E, and by the same logic sections 272A, 271FA and 271H) falls in the residuary clause, not the appeal-linked clause, and gets no extension for the appellate proceedings. For a penalty order passed on or after 1 April 2025, when the substituted section 275 took effect, compute from the end of the QUARTER and identify which of clauses (a) to (e) applies — the clock now hangs on completion of the proceedings, the receipt of the appellate order, the revision order, or the issue of the penalty notice, according to the case. Get the date the Assessing Officer referred the matter to the range head on record; on both computations available here — from the reference or from the assessment order — the order was late, which is the safest way to plead it.
Searched for later treatment; none was found. That is not the same as a source affirming it. No Bench has applied this order. The one later order that names it, Vimal Todi v. Addl. CIT (ITAT Indore, 6 March 2026), does not amount to treatment: the name appears only in the recital of the authorised representative's submissions — 'Ld. AR also filed a copy of order of ITAT, Jaipur in ITA Nos. 1057 to 1061/JP/2025 ...' — while the Indore Bench's own findings at paragraphs 16 to 20 rest on the Delhi High Court in Thapar Homes and the other decisions it discusses, and never mention this order. The Indore Bench reached the same conclusion on limitation independently, so the proposition has support from another Bench even though this order has not been applied. No appeal under s.260A to the Rajasthan High Court has been traced, and nothing overruling, doubting or distinguishing it has been found. Two qualifications belong with that status. The point is contested between High Courts. The Rajasthan High Court in CIT v Hissaria Bros, which the Tribunal followed as its own jurisdictional authority and recorded as affirmed by the Supreme Court, holds that penalty proceedings for defaults under s.269SS and s.269T are independent of the assessment so that clause (c) of s.275(1) governs; the Kerala High Court in Grihalaxmi Vision, pressed by the Departmental Representative, treats the penalty proceeding as beginning only with the competent officer's own notice. A Bench outside Rajasthan is not bound to take this order's view. Second, the order construes s.275 as it stood before 1 April 2025. The section was substituted by the Finance Act 2025 with effect from that date, and the six-month period now runs from the end of the quarter; from the same date the proviso to s.271D(2) puts the penalty in the hands of the Assessing Officer. For a penalty order passed on or after 1 April 2025 the arithmetic in this order cannot be copied across, though its principle — that limitation is jurisdictional and disposes of the appeal without the merits — is unaffected. 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 cause title lists five appeals, ITA Nos. 1057 to 1061/JP/2025, against three assessment years — 2012-13, 2016-17 and 2022-23 — and the Tribunal's paragraph 9 repeats the same three years for the four follower appeals while stating that ITA No. 1057 was for 2012-13. The year-to-appeal mapping cannot be read off this document and none is asserted here. A WARNING ABOUT THE TEXT OF SECTION 275. Some circulating renderings of this order splice the two versions of the section together, merging the pre-amendment sub-section (1)(a) to (c) with the post-amendment sub- sections (2) to (5), presenting the result as a single provision and dropping clauses (d) and (e) entirely. The order itself reproduces the two versions separately, and the Tribunal's reasoning applies the OLD section 275(1)(c). Anyone quoting the substituted section out of this order must check it against the section itself. On the dating, the substitution of section 275 is the Finance Act 2025's, carrying the footnote 'Sub. by Act No. 7 of 2025, w.e.f. 1-4-2025' and taking effect on 1 April 2025 — not, as is often stated, the Finance (No. 2) Act 2024's from 1 October 2024. That matters here because the penalty order under challenge was passed on 28 December 2024, before the substitution, so the old computation governed; under the substituted section the six-month period runs from the end of the QUARTER, and any computation carried across from the older cases to a penalty order passed on or after 1 April 2025 will be wrong. ATTRIBUTION INSIDE THE DOCUMENT. Paragraphs 12 to 29 appearing in it are the Rajasthan High Court's paragraphs in CIT v Hissaria Bros, reproduced within the Tribunal's discussion, and paragraph 7.2, with its first-person singular 'I find', is the Commissioner (Appeals) speaking. The Tribunal's own numbering ends at paragraph 9. For that reason the quotation used in this entry is located by its opening words rather than by a paragraph number, and a locator taken from the reproduced High Court paragraphs would be a fabricated citation. One more point of substance worth carrying: the Tribunal recorded that the Revenue had itself accepted the position by amending the law, the proviso to section 271D(2) requiring a penalty under section 271D to be imposed by the Assessing Officer from 1 April 2025, which removes the reference-to-the-Joint-Commissioner step that generated this dispute. 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.
All the appeals of the Revenue were dismissed. Limitation for a section 271D penalty is governed by clause (c) of section 275(1); reckoned either from the reference of 18-06-2023 the penalty had to be imposed by 31 March 2024, and reckoned from the assessment order of 23-03-2024 by 30 September 2024, whereas it was imposed on 28-12-2024, so the order was barred by limitation. The CIT(A) having correctly decided the matter on the technical ground, he had rightly not gone on to the merits, and the Revenue's ground on that footing also failed.
TaxSphere, “DCIT, Central Circle-02, Jaipur v Ashwani Gupta”, https://taxnotice.vittsphere.com/caselaw/case/dcit-v-ashwani-gupta-275-1-c-limitation-runs-from-the-assessment-not-the-jcit-notice/ (validity last checked 2026-09-08)
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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 liability was created by a journal entry and no money moved. Does 269SS still apply?
When does the s.275(1)(c) clock start for a s.271D penalty — the AO's satisfaction in the assessment order, or the Joint Commissioner's first notice?
The assessing officer directed penalty under section 271E in my assessment order, but the Additional Commissioner only issued the show cause notice years later. Is that penalty time barred?
