31 August 2010
With in the financial year in which the proceedings of penalty has been initiated or sis months from the end of the month in which action for imposition of penalty is initiated which ever period expires later. Reference :- Section 275(1)(c) of the Income tax Act,1961.
I wish to reply to TDS Department could be please help out .
In this matter company was running in heavy losses and could not deposit tds on time . A department survey was conducted on dated 23-1-2008 after reviweing the situation of company the officer agreed to company plea for waving of pentaly for nonfiling of Tds returns on time ie Rs 100 perday and advise the company to deposit the due TDS along with interest there on , however the matter was verbal and there was nothing in writing .
After few months company received a notice again in the same matter advising the company to deposit some more tds and the assessing officer referred the matter for penalty proceedings U/s 272A to ADDl CIT , the Date of Order is 2nd March 2009 .
Now again on Dated 11.08.2010 in the same matter department has issued a notice to company for imposition of Penatly U/s 272A ( 2)( K) read with section 274(1)
I feel the notice issued is time barred as per the income tax Act
You're correct to raise a concern about **limitation under Section 275(1)(c)** of the Income Tax Act, especially regarding penalty proceedings under **Section 272A(2)(k)** (for failure to file TDS returns/statements) read with **Section 274(1)** (procedure for imposing penalties).
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## ✅ Summary of Your Situation
1. **Survey Date**: 23.01.2008 2. **Verbal assurance**: Officer suggested waiver if TDS and interest paid (not documented). 3. **First Penalty Order**: 02.03.2009 (by Addl. CIT) 4. **Fresh Notice**: 11.08.2010 for penalty under same provisions
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## 🔍 Legal Provision Involved
### **Section 275(1)(c)** – Time Limit for Imposing Penalty
> No order imposing a penalty shall be passed **after the expiry of the financial year** in which proceedings were initiated, or **six months from the end of the month** in which **action for imposition of penalty is initiated**, **whichever is later**.
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## ✅ Analysis of Your Case
* If the **action for penalty** under **272A(2)(k)** was **already initiated in 2008–09**, and **an order was passed on 02.03.2009**, then any **further penalty** for the **same default** cannot be initiated **again** in August 2010.
* A **fresh penalty notice in 2010** on the **same issue** appears **time-barred** under **Section 275(1)(c)** unless:
* It's for **a new/different default** (e.g., a different quarter/year), or * There was a procedural error in the original order that warranted a re-initiation (this must be clearly documented).
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## 📝 Suggested Draft Reply to the Department
> **Subject**: Objection on Time-Barred Penalty Notice u/s 272A(2)(k) > > Respected Sir, > > With reference to the notice dated **11.08.2010** issued under section **272A(2)(k) read with section 274(1)**, we wish to submit that the said notice pertains to a matter for which penalty proceedings were already initiated earlier, and a penalty order was passed by the Addl. CIT on **02.03.2009**. > > As per the provisions of **Section 275(1)(c)** of the Income Tax Act, 1961, the time limit for imposition of penalty has expired. The said section prescribes that no order of penalty can be passed after the expiry of the financial year in which proceedings were initiated, or after six months from the end of the month in which action for imposition of penalty was initiated — whichever is later. > > Since the current notice refers to the same matter and the penalty proceedings were already concluded in FY 2008–09, any further penalty action now is time-barred and void ab initio. > > We therefore request that the said notice be withdrawn. > > Thanking you, > Yours sincerely, > **\[Your Name/Company Name]**
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## ✅ Conclusion
Yes, based on what you've shared, **the 2010 notice appears time-barred** under Section 275(1)(c), provided it's for the **same default** already addressed in the 2009 penalty order.
Let me know if you'd like help customizing the reply on your company's letterhead.
CAclubindia
