Section 275

Section 275 — the law in short

What the courts have decided on section 275, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Saumya Chaurasia v Union of India High CourtHelps departmentNo later treatment found
  CBDT Circular 24/2019 says prosecution under s.276C(1) is to be launched only after the ITAT confirms the penalty. My appeal is still before the CIT(A). Can the sanction under s.279(1) be quashed on that ground?
  Not where the amount sought to be evaded exceeds Rs.25 lakh. On the Delhi High Court's reading of Circular No.24/2019 dated 09.09.2019 as clarified by Circular No.5/2020 dated 23.01.2020, the requirement of prior administrative approval of a collegium of two CCIT/DGIT rank officers, and the direction that prosecution be launched only after the ITAT confirms the penalty, are addressed to cases at or below the Rs.25 lakh threshold; above it the approval of the sanctioning authority, the Principal Commissioner, suffices and no pre-condition is attached. The challenge to Circular 5/2020 under Article 14 was rejected.
• CIT (TDS) v Turner General Entertainment Networks India High CourtHelps taxpayerUnder appeal
  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.
• Grihalakshmi Vision v Addl CIT High CourtHelps departmentHigh Courts differ
  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?
  From his notice, on this judgment. The Kerala High Court held that because a penalty under s.271D or s.271E may be imposed only by the Joint Commissioner, only the Joint Commissioner can initiate the proceedings; the assessing officer cannot. It follows that the sentence in the assessment order saying that proceedings under those sections are initiated is inconsequential, and that limitation under s.275(1)(c) is measured from the Joint Commissioner's notice. On the dates before the Court - assessment order 6 November 2007, notice by the Joint Commissioner 28 March 2008, penalty orders 29 July 2008 - the penalty orders were in time. The appeals were rejected and the questions answered in favour of the Revenue.
• CIT v Mohair Investment & Trading Co High CourtHelps departmentSuperseded by amendment
  The CIT(A) order came two years ago but the appeal is still in the Tribunal. Is the penalty already time-barred?
  No. The proviso to s.275(1)(a) does not take away the six months the officer gets from the end of the month in which the Tribunal's order is received. Where successive appeals are filed, the clock in the main limb runs from the final appellate order; the proviso's one-year period from the end of the financial year of receipt of the CIT(A)'s order is an exception for cases that stop at the CIT(A).
• DCIT, Central Circle-02, Jaipur v Ashwani Gupta ITATHelps taxpayerNo later treatment found
  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.
• Sushil Kumar Paul v ACIT ITATHelps taxpayerSuperseded by amendment
  Search penalty under s.271AAB, but the notice used the ordinary s.271(1)(c) printed form. Is that valid?
  No. Section 271AAB has different rates under different clauses, so the notice must tell you which clause and which rate is proposed. A mechanical s.271(1)(c) form bears no relation to the ingredients of s.271AAB and cannot support the penalty.
• Statutory position — s.275 as substituted: penalty limitation now runs from the end of the QUARTER CBDT Circulars & InstructionsCuts both ways
  I am checking whether a penalty order is out of time. Is the old six-months-from-the-end-of-the-month rule still the test?
  No. Section 275 has been substituted, and under the substituted provision no penalty order under Chapter XXI may be passed after the expiry of six months from the end of the QUARTER in which the triggering event occurs, with five separate triggers in clauses (a) to (e). The financial-year limb and the month-end limb of the old sub-section (1), and the old proviso giving one year from the end of the financial year in which the appellate order was received, are gone.
• Statutory position — s.271J: the Rs 10,000 penalty on the accountant, merchant banker or registered valuer personally CBDT Circulars & InstructionsCuts both ways
  A notice under section 271J has come to me, the chartered accountant who signed the report, not to my client. On what can it be levied, and how much?
  Section 271J allows the Assessing Officer or the Commissioner (Appeals), in the course of any proceedings under the Act, to direct an accountant, a merchant banker or a registered valuer who has furnished incorrect information in any report or certificate under the Act or the Rules to pay a penalty of Rs 10,000 for each such report or certificate. It reaches only those three classes of person, each defined in the Explanation; it cannot be levied on the assessee who filed the report.
• Statutory position — s.271H replaced s.272A(2)(k) for TDS and TCS statements from 1 July 2012 CBDT Circulars & InstructionsCuts both ways
  The TDS officer has levied a penalty for a late quarterly statement. Which section applies — the daily penalty in section 272A(2)(k) or section 271H — and what gets me out of it?
  It depends on when the tax was deducted or collected. For tax deducted or collected before 1 July 2012 the penalty is under section 272A(2)(k) at Rs 100 for every day of default, capped by the proviso at the amount of tax deductible or collectible. For tax deducted or collected on or after 1 July 2012 the second proviso to section 272A(2) bars that penalty altogether and section 271H applies instead — a sum of not less than Rs 10,000 and up to Rs 1,00,000, directed by the Assessing Officer, with an escape in section 271H(3) which since 1 April 2025 requires the statement to have been filed within ONE MONTH of the prescribed time, not one year.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.