Section 275(1)(c) of the Income Tax Act
Income-tax Act, 2025: s.472
Section 275(1)(c) falls under section 275 of the Income-tax Act, 1961, which corresponds to section 472 (Bar of limitation for imposing penalties) of the Income-tax Act, 2025.
Read section 472 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 275(1)(c) is CIT v. Eli Lily & Co. (312 ITR 225), cited in 221 of the 295 judgments on BharatTax that turn on this section.
Leading authorities on Section 275(1)(c)
Section 195 of the Income Tax Act, which mandates tax withholding on payments to non-residents, applies only to sums that are otherwise chargeable to tax under the Act. Tax withholding provisions are not charging provisions.
Penalty proceedings for defaults under Sections 269SS and 269T are independent of assessment proceedings; therefore, the limitation period under Section 275(1)(c) for imposing such penalties is not contingent on the completion of appellate quantum proceedings.
The date of initiation of penalty proceedings for the purpose of Section 275(1)(c) is when the Assessing Officer records a satisfaction or recommends penalty, not the later date when the Joint/Additional Commissioner of Income Tax issues the penalty notice.
The relevant date for determining the limitation period under Section 275(1)(c) for passing penalty orders under Sections 271D and 271E is the date of passing the assessment order.
For initiating penalty proceedings under Section 271D or 271E, the Assessing Officer must record satisfaction in the assessment order; non-recording of such satisfaction is fatal to the penalty.
The satisfaction of the Assessing Officer is not a prerequisite for the initiation of penalty proceedings. Penalty proceedings initiated by the Joint Commissioner of Income Tax are valid. The date of the show cause notice by the penalty imposing authority is relevant for computing limitation for imposing penalty under Section 271DA.
Penalty orders under sections 271D and 271E passed beyond six months from the end of the month in which the assessment was completed are barred by limitation. Section 275(1)(c) is applicable to such cases, and the limitation period is not reckoned from the date of the show-cause notice.
The date of issuance of a Show Cause Notice (SCN) for penalty is the relevant starting point for calculating the limitation period for passing penalty orders.
Appeals related to statutory limitation periods for penalty proceedings are decided by considering relevant High Court judgments.
